The euro hovered near a one-month high against the dollar on Monday, boosted by prospects of an ECB rate hike and a fresh Greek bailout deal, while concerns about the US economy sent stocks tumbling.

On government debt markets, growth worries outweighed expectations of fresh aid for Athens, supporting demand for safe-haven assets to send Bund futures higher.

The single currency continued a recent strong run after a review of Greece's accounts by international lenders on Friday allayed fears of a near-term default and opened the way for an injection of fresh funds.

But it shed some of its gains after Germany's finance ministry said a lenders' inspection report on Greece was not expected until mid-week and all options remained on the table.

The prospect of extra aid, totalling up to 100 billion euros ($146.4 billion) according to German news magazine Der Spiegel, will not answer the question of Greek solvency in the longer term but would buy more time for the regional laggard.

It also leaves the path open for a further rate hike as the European Central Bank looks to rein in inflation, a goal given fresh impetus after euro zone producer prices rose in April.

The data reinforced a belief the ECB will signal a July rate rise to 1.50 percent at Thursday's meeting.

'This is likely to provide further near-term support to the euro, given that the markets' focus now appears to be turning back to (US/euro zone) interest rate differentials following likely agreement on further support for Greece,' Howard Archer, chief European economist at IHS Global Insight, said.

The euro was trading at $1.4614 at 1031 GMT, with a test of $1.50 expected in the coming weeks if the currency can push through resistance at $1.4710.

By 1031 GMT the dollar index had recovered from lows to trade up 0.1 per cent.

'The provisos (for more euro gains) are that US equity markets fail to undergo a deeper correction and that Greece's political opposition does not scupper fresh austerity measures,' BNP Paribas strategists wrote in a report.

Greece's cabinet will debate the austerity plans on Monday as popular protests swell and Prime Minister George Papandreou seeks to avoid the fate of socialist peers in bailed-out peripheral peer Portugal, which voted in a new centre-right government on Sunday.

Concerns over the outlook for growth in the world's largest economy following dire US non-farm payrolls numbers on Friday sent Asian shares down overnight and drove fresh falls for European stocks.-Reuters