* Euro hits four-month lows vs dollar * German bunds up on fear of Cyprus bailout implications * European shares tumble as euro zone data offsets U.S. lift By Marc Jones LONDON, March 27 (Reuters) - The euro hit a four-month low, shares fell and safe-haven German government bonds climbed to their highest in three weeks on Wednesday, as poor data added to euro zone worries following its controversial bailout of Cyprus. Cyprus is expected to complete capital control measures on Wednesday to prevent a run on banks by depositors after the country agreed a bailout deal that will wipe out some senior bank bondholders and impose losses on large depositors. The worry among investors and economists is that despite attempts by some officials to dismiss the idea, the plan could become a blueprint for any future euro zone bailout. It pulled the euro to a four-month low of $1.2763 and the dollar rose to a seven-month high versus a range of currencies. "After the deal for Cyprus there is concern about what would happen if another country were to ask for financial help," said Niels Christensen, currency strategist at Nordea. "It is difficult to point at positive factors for the euro ... We need good economic data from the euro zone to support the euro going forwards, and people fear that this is not very likely." The concerns were amplified by a wave of bleak data that painted a stark picture of the region's troubles. The first fall in euro zone economic confidence after four months of gains in March stacked on top of an ongoing slump in Italian manufacturing and retail sales and a confirmation that France's economy contracted at the end of last year. German government Bund futures, an asset that investors value in times of increased tension, rose 75 ticks, their biggest jump since inconclusive Italian elections last month rattled markets. In an interview with Reuters, rating agency Moody's warned the euro zone's problems and the political stalemate in Rome were providing a headwind to the growth Italy needs to keep its debts manageable. Despite the current turbulence, Italy became the first of the euro zone's big debt-laden Mediterranean members to seriously test the bond market since the Cyprus deal. It cleared the test, but the rising tensions saw it pay the highest interest rate on its five-year bonds since October last year, though longer-term 10-year costs were slightly lower. SHARES BUCKLE Wall Street was also expected to be dragged lower by the euro zone concerns when trading resumes. U.S. data published on Tuesday, which signalled the world's largest economy remains in recovery mode, had helped stock markets early in the day, but euro zone worries quickly sent them into reverse. Separate reports showed demand for durable U.S. manufactured goods surged in February, while U.S. single-family home prices started the year with the biggest annual increase since June 2006. Ahead of the Wall Street restart, the FTSEurofirst 300 index of top European shares was down 0.7 percent and heading for its worst day since the Italian elections. Spain had added to the gloom after it revised up its 2012 budget deficit to almost 7 percent. The IBEX in Madrid was 1.5 percent lower by 1245 GMT, Paris's CAC-40 was down by the same amount, and Frankfurt's DAX was 1 percent lower. The falls in Europe left MSCI's index of world shares , which tracks 6000 stocks in 45 countries, down 0.3 percent. COMMODITY CAUTION Meanwhile, commodity markets were more mixed as investors weighed the euro zone worries against Tuesday's broadly encouraging U.S. data. Growth-sensitive copper fell 0.6 percent, but oil rose towards $110 a barrel as it extended Tuesday's gains on hopes demand in the world's biggest oil consumer will pick up. Having risen during the Cyprus turmoil, gold was on course for its fourth session of losses as it dipped to $1,592.44 an ounce. "The focus will remain on Cyprus and its developments in coming sessions," Danske Bank analyst Christin Tuxen said. "The U.S. data was fairly strong yesterday, and there is a picture now that the United States is leading the global economic recovery, alongside China of course, which is comforting for investors who would otherwise be looking for the safe havens like gold."