* Euro dips on weakening German data
* HSBC China manufacturing PMI hits 3-mth high, lifting oil
* European shares and U.S. stocks futures recover as earnings eyed
LONDON, Oct 24 (Reuters) - The euro hit a one-week low against the dollar on Wednesday after surprisingly weak data from regional powerhouse Germany, though an improving outlook for China supported shares and oil.
The Chinese data was also set to give Wall Street a modest lift when share trading begins after Tuesday's sharp falls.
But the dismal German data took its toll on the euro, which fell 0.4 percent to $1.2922, well below its peak of $1.3140 hit early last week.
Activity in Germany's manufacturing and service sectors declined for a sixth straight month in October as order books thinned, indicating Europe's largest economy had clearly stagnated in the second half of 2012.
A separate poll of 45 economists by the Munich-based Ifo think-tank added to the gloom by revealing that business sentiment in October fell below even the weakest of forecasts.
"In all, while recent actions by euro zone policymakers may have calmed the markets, the euro zone's economic problems remain firmly in place," said Ben May, European economist at Capital Economics.
October's Composite Purchasing Managers' Index (PMI) survey for the whole 17-nation euro zone bloc meanwhile confirmed that the recession was likely to deepen across the whole region as activity hit its lowest levels since June 2009.
The euro could gain support later in the session when European Central Bank president Mario Draghi faces questions from German lawmakers.
Draghi is likely to be grilled on the ECB's bond-buying plans to ease the debt crisis, which have faced fierce opposition from some in Germany.
In equity markets any selling on the weak German data was offset by an earlier Chinese PMI report that pointed to a modest recovery for the world's second largest economy in October from the growth slowdown seen during the third quarter.
HSBC's Flash Manufacturing Purchasing Managers Index (PMI) for China rose to a three-month high of 49.1 for October, although it was still below the 50-point mark that separates contraction from expansion.
The Chinese data helped Asian share markets trim losses caused by weak corporate earnings and left the MSCI world equity index virtually unchanged after three straight days of losses.
"I don't think China is going to get the global economy out of the rut that it's in, but what it might do is prompt a little bit of caution about selling (equities)," said Michael Hewson, senior markets analyst at CMC Markets.
The Chinese PMI data lifted hopes of greater demand from the world's No. 2 oil consumer, sending Brent crude up 40 cents a barrel to $108.65 and ending a six-day losing streak. U.S. oil rose 16 cents to $86.83.
"The demand picture is looking less bad than it was," said Jack Pollard, research analyst at Sucden Financial.
However, investors were awaiting inventory numbers from the Energy Information Administration (EIA) due later in the day to gauge the demand outlook for the United States.
Gold was around $1,708.90 an ounce, holding near a seven-week low of $1,703.50, while dealers awaited the U.S. Federal Reserve's policy statement later in the day.
The Fed unveiled a third round of bond purchases when it last met in September to try to rev up sluggish economic growth and is not expected to take any fresh steps when it ends its two-day meeting.
The metal has suffered along with other industrial commodities this year from perceptions that the global economy is struggling for growth and is on track to decline in October for the first month in since May.