By Julie Haviv NEW YORK, Sept 28 (Reuters) - The euro rose for the fourth straight day a gainst the dollar on Wednesday on cautious optimism Greece's lenders will allocate the bailout funds necessary for it to avoid a near-term default. While the euro briefly turned negative against the dollar as U.S. stocks fell, the euro was supported also by data showing inflation in Germany ticked up, which should ease pressure on the European Central Bank to lower rates. 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, while Germany suggested a new bailout may have to be renegotiated. For story see Finland on Thursday 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. 'With 10 of the 17 member eurogroup having ratified a bailout fund, there is no question that Europe is clearing each hurdle slowly and inching closer to a broader and more ambitious plan to expand their resources and prevent contagion,' said Kathy Lien, director of currency research at GFT Forex. In New York trade, the euro was up 0.1 percent at $1.3606, but down from a one-week high of $1.3690 hit in the overseas session in which a U.S. investment bank was cited as a large buyer. If European policymakers do not acknowledge that a Greece deal is in the works quickly, the relief rally could come to an end, Lien said. 'Although currencies and equities have held on to their gains, the price action in the market suggests that the patience of investors is wearing thin,' Lien said. Fears of near-term Greece default and its impact on Europe's banking system is largely behind the euro's 5.2 percent slide against the dollar this month. Ongoing talk of proposals to leverage up the region's 440 billion euro rescue fund -- the European Financial Stability Facility -- fuelled demand for riskier assets on Tuesday. But media reports suggested a split had opened 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.

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