GLOBAL MARKETS-Dollar gains on lower rate cut expectations, stocks flat

(Adds U.S. market open, byline, dateline; previous LONDON)
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Dollar gains as traders pare bets on bold U.S. rate cut
* Gold sheds 1% as bets on big U.S. rate cut fades
* European stocks close lower, Wall Street rises

By Herbert Lash
NEW YORK, June 26 (Reuters) - The dollar rose and European
shares fell on Wednesday as traders scaled back expectations of
an aggressive cut in U.S. interest rates in July, while Wall
Street rose on hopes of a China-U.S. trade breakthrough at the
G20 summit later this week in Japan.
Gold fell 1% after Federal Reserve Chairman Jerome Powell
said on Tuesday the U.S. central bank is "insulated from
short-term political pressures," suggesting policymakers would
not bow to pressure from President Donald Trump to sharply cut
rates.
Trump said Powell was doing a "bad job" and he called on the
central bank to lower rates so the United States can compete
with countries that he said are devaluing their currencies.
A pullback in the Japanese yen and Swiss franc was limited
as traders remain jittery about a resolution to the U.S.-China
trade spat. Some bids for both safe-haven currencies persisted
amid tensions between Iran and the United States. "Our expectation is that there will be some sort of trade
truce or some goodwill signs coming out of the G20 meetings
between Donald Trump and (Chinese President) Xi Jinping," said
David Kelly, chief global strategist at JPMorgan Funds.
"But neither side is ready to end the war," Kelly said,
adding trade differences between the two countries likely will
continue through to the U.S. presidential elections in November
2020.
Earlier Wednesday, Trump told Fox Business Network he would
impose additional duties on Chinese imports if he does not
clinch a deal with Xi. MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.01%, while the pan-European STOXX 600 index .STOXX lost
0.23% and the FTSEurofirst 300 index .FTEU3 of leading
regional shares fell 0.22%.
Stocks rose on Wall Street.
The Dow Jones Industrial Average .DJI rose 49.15 points,
or 0.19%, to 26,597.37. The S&P 500 .SPX gained 5.33 points,
or 0.18%, to 2,922.71 and the Nasdaq Composite .IXIC added
48.14 points, or 0.61%, to 7,932.85.
Gold snapped a six-session streak of gains after prices hit
a six-year peak of $1,438.63 on Tuesday, mostly on expectations
the Fed would cut rates in acknowledgment of slowing growth.
Spot gold XAU= shed 0.93% to $1,409.50 an ounce.
The greenback was slightly lower against the euro at
$1.1374, and the dollar index .DXY edged up 0.04%.
The Japanese yen JPY= weakened 0.44% versus the greenback
at 107.68 per dollar.
The benchmark 10-year U.S. Treasury note US10YT=RR fell
11/32 in price to lift its yield to 2.0296%.
Germany's 10-year bond yield nudged off record lows.
Oil prices rose about 3%, buoyed by U.S. government data
that showed a much larger-than-expected drawdown in U.S. crude
inventories and surprise drops in refined product stockpiles.
Brent crude LCOc1 futures rose $1.48 to $66.53 a barrel.
U.S. West Texas Intermediate (WTI) crude CLc1 futures rose
$1.59 to $59.42 a barrel.