Asian shares, euro slip as data casts doubt on recovery

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Asian shares slipped on Thursday and the euro languished near a 2-week low after disappointing economic data from both sides of the Atlantic rekindled concerns about the strength of global growth.

Commodities and the Australian dollar - all sensitive to growth expectations - also struggled as the data put investors on the defensive and limited appetite for riskier assets.

The euro had fallen nearly 1 per cent to $1.3122 on Wednesday, and European stocks also dropped, after a survey showed eurozone factories sank further into decline last month, with the downturn hitting Italy and Spain hard and appearing to take root among core members France and Germany.

With recently-downgraded Spain looking to raise funds in the bond market on Thursday, the European Central Bank will be under pressure at its policy meeting later to do more to shield weaker euro zone members from additional pain.

"It seems too early for another wave of easing, but that is where the risks are skewed. The outcome is continued downward pressure on EUR/USD," said Sebastian Galy, strategist at Societe General.

The euro traded around $1.3140 on Thursday, down around 0.1 percent on the day.

U.S. stocks also eased on Wednesday as data showed a slowdown in private sector hiring, tempering the optimism from a better-than-expected manufacturing survey at the start of the week that had driven the Dow to its highest in more than 4 years.

The weakness continued in Asia, where MSCI's broadest index of Asia Pacific shares outside Japan fell 0.3 percent, with Hong Kong shares down 0.5 percent. Tokyo financial markets were closed for a public holiday.

FOCUS ON PAYROLLS

The weaker than expected U.S. jobs data focused attention on the broader non-farm payrolls report due on Friday.

"With those numbers still ahead of us people are going to be a little bit hesitant to jump into the market right at the present," said Angus Gluskie, portfolio manager at White Funds Management in Sydney.

Generally improving economic data from the United States has buoyed equity markets in 2012, after a broad retreat in the second half of 2011, with the MSCI Asia ex-Japan up around 13 per cent over the year to date and Wall Street's S&P 500 gaining near 12 per cent.

Commodity markets struggled for traction, with U.S. crude slipping a few cents but holding above $105 a barrel, while Brent crude rose 10 cents to $118.30. Oil had fallen on Wednesday on the disappointing data and a build-up in inventories in top consumer the United States.

"Risk markets are overall very cautious ahead of this non-farm payrolls data, that's why we're seeing reduced volumes and a few bets being taken off the table," said Ben Le Brun, market analyst at OptionsXpress in Sydney.

Copper edged below $8,300 a tonne and gold, which in recent months has lost its safe-haven appeal and mostly tracked the performance of riskier assets, dipped 0.2 per cent to around $1,649 an ounce.

The Australian dollar, sensitive to demand for the commodities that drive the Australian economy, eased 0.3 per cent to around $1.0295.