* European shares edge higher, euro under pressure ahead of inflation data
* Dollar up slightly vs basket of currencies
* Asian ex-Japan shares dip, Nikkei adds to Monday's 2.4 pct slide
By Marc Jones
LONDON, Jan 7 European shares clawed higher ahead of inflation data on Tuesday after fresh falls in Asia left stocks there at a near-four month low and disappointing U.S. data had weighed on Wall Street.
The euro was also looking vulnerable ahead of what was expected to be another dip in euro zone inflation, two days before the European Central Bank's first policy meeting of the year.
National Australia Bank strategist Gavin Friend said Monday's low inflation reading from Germany meant the regional figure could potentially fall back to the 0.7 percent low that prompted the ECB to suddenly cut interest rates in November.
Markets were lacking direction overall, however, as Monday's weak U.S. services sector data upped the focus on Friday's non-farm jobs and stacked on top of concerns that have built up over the last week about a stuttering China.
"For choice, I am a little bit risk-off here with what's going on with the inflation number, with equities off and things just turning over a little bit in terms of the data," Friend said. "The problem is we have non-farm payrolls on Friday which is basically a coin-flip."
In the currency market, the result of the reduced risk appetite was a gentle climb by the dollar. It came despite a drop in benchmark U.S. government bond yields, the reverse of what has been driving the dollar's recent rise.
European shares started the day all but flat before nudging tentatively higher as traders largely held off from making any decisive moves ahead of the 1000 GMT inflation data.
A fourth day of falls in Asia, however, led by a 0.6 percent drop on Tokyo's Nikkei left MSCI's 45 country world share index in the red again as it fell to its lowest in three weeks.
IRISH BONDS SMILING
Among commodities, gold advanced 0.4 percent to $1,242.04 an ounce, heading for a sixth straight day of gains and sitting not far from a three-week high of $1,248.30 set on Monday.
Having suffered its worst run in over three decades last year, bullion is currently one of 2014's best performing assets.
"We have been rather surprised by gold's resilience over the course of the last week, but suspect that it's upside staying power will be limited," INTL FCStone analyst Edward Meir said.
The harsh Arctic snap in the U.S. boosted expectations about energy use, helping U.S. crude futures put on 0.3 percent to $93.78 a barrel having fallen 0.6 percent overnight to a one-month low.
Euro zone government bonds also made ground in early deals in the wake of the gains by Treasuries.
Irish bonds topped the board as interest for its new 10-year bond - its first sale since it exited its EU/IMF bailout - exceeded expectations. [ID:nL6N0KH0SL ]
The euro meanwhile was a touch softer at $1.3625, having come off a four-week low of $1.35715 set in the previous session, while the greenback was up 0.1 percent at 104.34 yen , covering some of Monday's 0.6 percent decline.
According to data from the Commodity Futures Trading Commission, currency speculators pared bets in favour of the dollar in the week ended Dec. 31 to the lowest in about six weeks.
Before Friday's jobs report, investors will focus on Wednesday's minutes of the Fed's December policy meeting. They are likely to draw added interest after Monday's confirmation of Janet Yellen as the central bank's new head.
"We expect to see good interest to buy USD on dips heading into the jobs release," analysts at BNP Paribas wrote in a note.