European shares edged away from four-month highs and the euro dipped on Friday with concern focused on Spain's fiscal position despite the expected approval of its bank bailout plan later in the day.
Oil prices also eased after hitting an eight-week peak on supply concerns linked to rising Middle East tension, but the rally in soft commodities, which has seen corn and soybean prices soar to record highs, showed no signs of abating.
The FTSEurofirst 300 index <.FTEU3> of top European companies was down 0.3 percent at 1,061.44 in early trade, after closing at its highest level since early April on Thursday, helped by a robust start to second quarter earnings season.
Gradual moves by euro zone authorities to tackle the region's debt crisis and hopes central banks will ease policy to boost global growth have also improved sentiment in equity markets since the beginning of June.
"I do see profit taking coming in sooner rather than later. I don't see how the UK and European markets can keep ignoring Spanish bond yields at above seven percent," said JN Financial senior trader Adrian Redmond.
The euro fell 0.2 percent against the dollar to $1.2253, staying above a two-year low of $1.2162.
Euro zone finance ministers are expected to finally sign off on a deal to bail out Spain's banks with up to 100 billion euros but the exact amount will probably not be known until September.
The impending bank bailout was not having much impact on Spanish bonds, with the 10-year debt yield remaining near an unsustainable high 7.0 percent level although a rise in financial stocks lifted Spain's IBEX <.IBEX> by 0.2 percent, bucking the trend elsewhere in the region.
