* European shares at 1 month high
* Rise after Alcoa showcases solid start to U.S. earnings season
* Greek aid deal supports euro, euro zone debt
* Oil eases as supply boosts outweigh Egypt worries
By Marc Jones
LONDON, July 9 World shares extended gains on Tuesday and the dollar hovered near a three-year high, spurred on by a good start to the U.S. earnings season that added extra gloss to last week's strong jobs data.
Share markets reacted positively after Alcoa, the largest U.S. aluminium producer, kicked off the country's reporting season with a larger-than-expected adjusted second-quarter profit.
Europe's broad FTSEurofirst 300 share index climbed almost 1 percent to its highest level in a month as a deal to drip-feed Greece the latest 6.8 billion euro instalment of its bailout added to the upbeat mood.
Core and peripheral euro zone debt also made solid gains and the euro moved off the seven-week low it has been hovering around since the European Central Bank made clear last week it remains ready to cut interest rates again.
"What I think to has been very positive for the markets is that the ECB was more dovish than expected last week," said Rabobank macro strategist Emile Cardon.
In Asia, Japan's Nikkei share average finished up almost 2.6 percent, near a six-week high, as the bright U.S. data helped the yen slip back below 101 yen to the dollar .
The dollar index that measures it versus six major currencies was back on the front foot at 84.236 by mid-morning, near Monday's three-year high of 84.588.
With more U.S. earnings due later, stock futures pointed to Wall Street opening up around 0.5 percent. In a note over the weekend Goldman Sachs said rising earnings, coupled with stable margins, should lift the S&P 500 by 8 percent to the investment bank's year-end target of 1,750.
The index ended at 1,640.46 on Monday.
The late evening Greek aid deal in Brussels helped nudge the euro up to $1.2886. But it was slipping back again by 0945 GMT, and with the Fed and the ECB appearing to be facing in opposite policy directions analysts saw more dollar strength.
"In the medium term I see the dollar broadly stronger," said Vasileios Gkionakis, Global Head of FX Strategy at UniCredit in London.
"Firstly on the back of the two dovish central bank announcements (from the ECB and Bank of England) we saw in Europe last week plus the fact data in the U.S. is getting better and better."
Ian Stannard, head of European FX strategy at Morgan Stanley, said any hints on Wednesday in the minutes from the Federal Reserve's June meeting that U.S. monetary stimulus could be tapered soon would also support the dollar.
Expectations that a stronger U.S. economy will give the Fed room to begin scaling back its bond-buying, most likely in September, have sparked a near 5 percent rally in the dollar and some 50-basis point rise in the benchmark 10-year U.S. bond yield since mid-June.
The yield on U.S. 10-year notes had risen as high as 2.755 percent on Monday, though bargain-hunting pushed it back to 2.656 percent ahead of the U.S. restart on Tuesday.
Back in Europe, sterling fell to a near four-month low against the euro while gilts rallied after data showed British manufacturing output unexpectedly contracted in May while the trade deficit widened.
Oil futures dipped, slipping from Monday's multi-month highs as news that a major Libyan oilfield and an Iraqi pipeline were returning to service eased concerns about global oil supplies sparked by unrest in Egypt.
Gold extended a rebound to a second day after breaking through a key technical level and as Chinese inflation data boosted its appeal as a hedge against rising prices in the world's second-biggest buyer of the metal.
Spot gold rose 1.7 percent to $1,250 an ounce by 0935 GMT.