* Crude oil edges lower in fifth day of falls
* World shares look to avoid eighth fall in 10 sessions
* Dollar nudges higher amid talk of Fed rate hike
* Aussie dollar tumbles on rate cut talk
* Euro zone meets on latest Greek aid deal
By Marc Jones
LONDON, May 24 (Reuters) - Oil prices fell for a fifth
consecutive day on Tuesday and financial markets were volatile
as investors wait to see whether U.S. interest rates will be
raised next month.
Asian shares stumbled to near 2-1/2-month lows overnight
though Europe was in better form as confirmation that Germany's
economy had a solid start to the year added to hopes that talks
in Brussels will secure an unusually swift aid deal for Greece.
.EU
Britain's FTSE 100 .FTSE , Germany's DAX .GDAXI and
France's CAC .FCHI climbed 0.8 to 1 percent as even markets
like Russia .IRTS shrugged off the dip in commodity prices to
carve out gains.
In currency markets, the dollar continued to feed off
revived U.S. rate hike bets although it was the Aussie dollar
that caught the eye as speculation about more rate cuts there
triggered its heftiest fall in 4-1/2 years. FRX/
New Zealand's dollar, which tends to follow the Aussie's
movements, also fell 0.7 percent to a two-month low of $0.6706
NZD=D4 , while oil exporter Canada's dollar hit a seven-week
low CAD=D4 to underscore the ongoing market uncertainty.
"Everyone is worried about a June hike from the Fed so we
are in a bit of a directionless market at the moment," said
Allianz (DE:ALVG) Global Investors' Shahzad Hasan.
"I think what is more important is the language if they do
hike. Do they continue or do they stop after June, and what is
the trajectory for the Fed funds rate in 2017."
Europe's government bond markets saw a broad fall in yields.
Greek yields GR10YT=TWEB hovered at six-month lows on hopes
that euro zone finance ministers may be able to agree a new aid
plan for Athens without any last minute panics.
Greek lawmakers on Sunday approved tax increases and a new
privatisation fund to pave the way for a deal, leaving the onus
on the rest of the bloc as the International Monetary Fund
reiterated its demands for full-blooded debt relief.
"Providing an up-front, unconditional component to debt
relief is critical to provide a strong and credible signal to
markets," a report from the Fund's staff said. COMMODITIES
Stocks in China .SSEC and Japan .N225 lost 0.7 percent
apiece, leading Asian markets down, though some investors were
wary of chasing markets lower after their recent retreat.
Yang Hai, analyst at Kaiyuan Securities, said trading is
likely to remain dull for a while amid economic sluggishness.
"The current economic environment doesn't justify a
sustainable rebound. In addition, regulators are reducing
leverage in the asset management industry so money is not
flowing in."
Oil prices fell for a fifth day in thin trade as the
dollar's strength and talk of Iran upping production kept them
under downwards pressure.
The strong dollar also took its toll on gold ZAU= , which
dipped to a 3-1/2 week low and industrial metal copper CMCU3 ,
which neared a three-month low.
The U.S. currency clawed back some of Monday's 1 percent
losses against the yen and was last up 0.3 percent at 109.50 yen
JPY= and at $1.11 to the euro. EUR=
Philadelphia Fed President Patrick Harker said on Monday a
rate hike in June would be appropriate unless data weakens,
while St. Louis Fed President James Bullard said holding rates
too low for too long could cause financial instability.
Fed Chair Janet Yellen will appear at a panel at Harvard
University on Friday, a day on which investors will also see the
second estimate of U.S. first-quarter growth.
"We are seeing more dollar strength and a lot of it against
the smaller currencies," said Saxo Bank FX strategist John
Hardy. "The Chinese authorities are keeping the yuan exchange
rate quiet, too, which is giving the Fed the room to wax lyrical
and be as hawkish as they are being."