* Oil back below $30 after brief Thursday reprieve
* European stocks fall 1.2 percent, Asia shares hit
3-1/2-year low
* Commodity currencies face fresh beating with sentiment
frail
* Aussie dollar hits 7-year low, Canadian dollar at 13-year
low
By Dhara Ranasinghe
LONDON, Jan 15 (Reuters) - World stocks were set for a third
straight week of losses on Friday and commodity currencies took
another drubbing as oil prices fell back below $30, keeping
alive concerns about global growth.
European stocks .FTEU3 fell more than 1 percent, heading
back towards Thursday's 13-month lows, while Asian shares
skidded to 3-1/2 year lows .MIAPJ0000PUS .
Oil prices, which posted their first significant gains for
2016 on Thursday, came under fresh selling pressure as the
prospect of additional Iranian supply loomed over the market.
Brent crude LCOc1 fell 3 percent to $29.86, heading for a
weekly loss of more than 10 percent. U.S. crude fared even
worse, sliding almost 5 percent to $29.75, and was set for a
weekly decline of 10 percent.
The collapse in oil prices has spooked financial markets as
investors worry about the health of the global economy, with a
slowdown in China and volatility in its markets making for a
nervous start to the year.
"It's been another immensely volatile week," said Philip
Shaw, chief economist at Investec in London.
The Shanghai Composite .SSEC lost 3.5 percent, while the
CSI300 .CSI300 tumbled 3.2 percent. That put the former on
track for a 9 percent loss for the week, and the latter for a
decline of 7.2 percent.
Chinese shares extended their losses after data showed new
yuan loans in December were well below the previous month's
lending, and broad M2 money supply growth also slowed, with both
missing expectations.
China will publish a host of data on Monday and Tuesday,
including fourth quarter gross domestic product. ECONCN
U.S. retail sales data due later on Friday will also be on
investors' radar as they try to gauge the likelihood of the
Federal Reserve raising interest rates again in March.
FEELING THE PAIN
The combination of sliding oil prices and China concerns
delivered another knock to commodity-linked currencies.
The Canadian dollar fell to C$1.4521 against its U.S.
counterpart CAD= , its lowest level since early 2003, while the
Australian dollar fell to a seven-year low at $0.6880 AUD=D4 .
The U.S. dollar was weaker against the euro and the yen,
helping push the dollar index . DXY down 0.18 percent to
98.895.
"It's another risk-off day," said Chris Scicluna, head of
economic research at Daiwa Capital Markets. "We had an awful
session in Asia and that has spilt over into Europe."
Worries that a depreciating Chinese yuan could spark
competitive currency devaluations across the region have also
hit global shares this month.
On Friday, the yuan CNY=CFXS , posted modest gains. That
put the Chinese currency 0.1 percent up on the week, but it was
still around 1.4 percent weaker against the dollar than it
started the year and has lost nearly 5 percent since August.
The People's Bank of China set a marginally weaker midpoint
of 6.5637 CNY=SAEC . The spot market CNY=CFXS opened at
6.5920 per dollar and was changing hands at 6.5858 at 0935 GMT.