* Uncertainty over Greece hitting jittery euro
* Greek/German bond spreads close to record highs
* Australian dollar buoyed by rate expectations/commodities
(Updates prices; adds quote, dateline; previous TOKYO)
By Neal Armstrong
LONDON, April 7 (Reuters) - The euro held near a one-week low against the dollar on Wednesday on uncertainty over a proposed Greek aid deal, while the Australian dollar rallied against the yen on expectations of higher interest rates.
The euro has been pressured in recent sessions following a media report Greece wanted to renegotiate a joint EU-International Monetary Fund aid deal reached last month.
Greece denied the report but on Tuesday the yield spread between Greek and German government bonds exceeded 4 percentage points, the widest since the euro's launch.
"Renewed uncertainty over Greece is hurting an already jittery euro," said Stuart Bennett, senior FX strategist at Credit Agricole.
"Even though the market is already heavily short of euro, there is still downside risk."
At 0802 GMT, the euro was trading down around 0.1 percent versus the dollar at $1.3385 after dropping to a one-week low of $1.3353 on Tuesday.
"With Greek spreads to Bunds having blown out, the euro is going to be struggling to sustain gains," said Sue Trinh, senior currency strategist at Royal Bank of Canada in Hong Kong.
The single currency came off the day's lows after the euro zone's services purchasing manager index was revised higher to 54.1, its highest since November 2007, from an original estimate of 53.7 and February's 51.8.
Traders said sentiment towards the single currency was bearish with many macro funds selling the euro on rallies, targeting a move towards the year's low at $1.3265.
Worries over Greece's debts and those of other peripheral euro zone countries have knocked the single currency down almost 10 percent from its January high of $1.4582.
The euro was flat at 125.72 yen after losing over 1.2 percent on Tuesday.
AUSSIE BUOYED
The Australian dollar remained close to an 11-week high of $0.9288 set on Tuesday after the Reserve Bank of Australia on Tuesday raised its cash rate to 4.25 percent and flagged more hikes in the coming months.
Traders said a favourable outlook for commodity prices coupled with perceived dovish Federal Reserve minutes on Tuesday had boosted risk appetite, which was helping to underpin the Australian dollar.
The Fed said subdued inflation trends were likely to warrant an exceptionally low federal funds rate for an extended period. .
The Aussie topped 87.50 yen after breaching its 200-week moving average at 87.06 yen, but pulled back later after nearing resistance at 87.70, the 61.8 percent retracement of its fall in 2007 from above 107.80 to 55.11 in late 2008.
The yen stayed soft versus the dollar at 93.85 yen after hitting 94.26 in Asia, with rising short-term dollar rates and Treasury yields supporting the dollar.
The Bank of Japan said after keeping its monetary policy unchanged that the economy was picking up further, but analysts say prolonged deflation is likely to keep the government pressing the bank for more monetary easing.
(Additional reporting by Kaori Kaneko)