* Greece bailout funds appear likely
* Month- and quarter-end flows seen swaying euro
* Investors await speech by Fed Chairman Bernanke
NEW YORK, Sept 28 (Reuters) - The euro reversed course and fell on Wednesday, snapping a three-day advance against the dollar, as investors began to square positions ahead of month- and quarter-end.
Earlier the euro strengthened for the fourth straight session against the dollar on optimism Greece's creditors will give it bailout funds crucial to avoid a near-term default on its debt.
But month-end two-way flows dominated euro price action, with U.S. corporations and speculators selling the single currency as central banks bought it, a trader said.
"People are probably a little bit long (the euro) and squaring up ahead of quarter end and Jewish holidays," said Lane Newman, director of foreign exchange trading at ING Capital Markets in New York.
In mid-afternoon New York trade, the euro was down 0.2
percent at $1.3566
The single currency has gained 0.7 percent in the last four sessions, but with a 5.6 percent slide month to date, the year-to-date gain is only 1.4 percent.
Greece remains a focus for investors.
EU and IMF inspectors return to Greece on Thursday to decide whether Athens has done enough to secure a new batch of aid vital to avoid bankruptcy. Germany suggested a new bailout may have to be renegotiated. For details, see [ID:nL5E7KS0AC]
Finland on Wednesday voted to grant additional powers to the euro zone bailout fund, giving support to the euro. The proposal, which euro zone leaders agreed to in July, needs to be approved by the parliaments of all the euro zone nations.
"Markets remain intensely focused on European developments, where only slow and tentative progress in addressing the region's debt crisis is being made," said Nick Bennenbroek, head of currency strategy at Wells Fargo in New York.
Fears of a Greek default and its impact on Europe's banking system are largely behind the euro's September slide.
Talk of proposals to leverage up the region's 440 billion euro rescue fund -- the European Financial Stability Facility -- had buoyed demand for riskier assets this week, though investors are still cautious about pushing the euro too high.
Media reports suggest there are still splits within the euro zone over Greece's bailout terms, highlighting one of the many hurdles lying ahead for policymakers trying to resolve the debt crisis. [ID:nL5E7KS00J] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For more news on euro zone crisis [ID:nL6E7HL0JK] For Euro Zone Crisis page:http://link.reuters.com/jyr68r For Interactive timeline: http://link.reuters.com/rev89
Wells Fargo's Bennenbroek said news that bans have been extended on short-selling stocks in France, Italy and Spain may have helped unsettle markets in general and pressured the euro. [ID:nL5E7KS6QX]
The dollar fell 0.5 percent to 76.458 yen
Investors awaited a late afternoon speech by Federal Reserve Chairman Ben Bernanke to see if he offers some reaction to the market's mostly negative response to last week's Operation Twist by the U.S. central bank.
Any hint of even more monetary easing may further boost the euro to the detriment of the dollar. (Reporting by Nick Olivari and Julie Haviv; additional reporting by Wanfeng Zhou; Editing by Dan Grebler)