By Nichola Saminather and Lisa Twaronite
SINGAPORE/TOKYO (Reuters) - Asian shares inched higher on Friday but were still set to post a loss for July, led by China's biggest monthly drop in six years.
The dollar edged away from highs scaled after U.S. GDP data reinforced expectations that the Federal Reserve is likely to raise interest rates this year.
MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.3 percent at 0532 GMT, but recorded a loss of 5.9 percent for the month.
Financial spreadbetters predicted Britain's FTSE 100 to open 2 to 4 points higher, or up 0.06 percent, Germany's DAX to gain 2 to 3 points, or almost flat in percentage terms, and France's CAC 40 to rise around 4 points, or up 0.08 percent, on Friday.
"European equity markets are set to open almost exactly flat," Jonathan Sudaria, dealer at Capital Spreads, wrote in a note. "Although Asia as a region is up overnight, Shanghai markets are edging lower going into the weekend so the bulls should be treading cautiously going into the weekend."
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China's CSI300 index fell 0.1 percent, contributing to a 14.7 percent slump this month, and the Shanghai Composite Index lost 1 percent, extending July losses to 13.4 percent despite a series of support measures by authorities.
China's securities regulator said it is investigating the impact of automated trading on the market and has clamped down on 24 trading accounts found to have abnormal bids for shares or bid cancellations.
Japan's Nikkei stock index was up 0.1 percent, bringing July gains to 1.4 percent, becoming the only Asian market, excluding Australia and New Zealand, to end the month in positive territory.
Japanese economic data published before the open contained some worrying signals, including a drop in household spending, a fall in Tokyo-area consumer prices and a rise in the June jobless rate.
Investors also awaited more earnings from blue-chip companies and looked for signs of whether China's volatile stock markets were starting to take a toll on its economy.
Australian shares rose for a third straight day, as investors bought into higher-yielding financial sector stocks even as they too remained wary of volatility in China.
The S&P/ASX 200 advanced 0.5 percent, extending gains this month to 3.9 percent.
"With Greece out of the way and China not being such a big focus as it has been, we're back to watching the economic data," said Christopher Moltke-Leth, head of institutional client trading at Saxo Capital Markets in Singapore. "Particularly U.S. data, as we're getting close to a liftoff."
On Wall Street, the S&P 500 ended Thursday unchanged at 2,108.63, as downbeat earnings offset solid economic data.
U.S. gross domestic product data released on Thursday showed growth accelerated in the second quarter, though slightly short of some forecasts. Growth was tweaked higher in the first quarter, backing the Fed's assessment at its meeting this week that the economy was expanding "moderately."
"We believe there's enough here for the Fed to raise interest rates for the first time in nine years," said Kathy Lien, managing director at BK Asset Management in New York.
"While we are bullish dollars and believe that further gains are likely, there's just under two months to the next monetary policy meeting and the dollar is overbought," she said in a note to clients.
The dollar inched down about 0.1 percent on the day to 124.030 yen, after rising as high as 124.58 overnight, its highest level since June 10.
The euro edged about 0.1 percent higher to $1.0938, after dropping to a one-week low of $1.0835 on Thursday.
The dollar index, which tracks the greenback against abasket of six major rivals, was about 0.2 percent lower at 97.417, after rising to a one-week high of 97.773 overnight.
Crude oil slipped for a second session as concern over global oversupply intensified after the head of the OPEC oil exporters' cartel indicated there would be no cutback in production. U.S. crude was down 0.3 percent at $48.2 a barrel.
London copper too was facing its biggest monthly loss since January amid sputtering Chinese demand and a stronger dollar. It's set for a near 9 percent slump over July, its weakest showing since January, and the second-worst performance since 2012.
The stronger dollar also pushed down gold, which is on track for a sixth straight weekly fall, its longest retreat since 1999. It fell 1 percent with a 5-1/2-year low in sight. Spot gold was last steady on the day at $1,085 per ounce.
(Editing by Shri Navaratnam and Eric Meijer)