* European stocks give up gains on caution before Fed
meeting
* Wall Street set to open lower
* Dollar lifts off near three-week low vs basket
* Oil falls on prospect of weaker demand
By Nigel Stephenson
LONDON, Sept 14 (Reuters) - European shares gave up the
day's gains on Monday, the dollar stalled and oil prices fell as
investors positioned for a U.S. Federal Reserve meeting later
this week that could see interest rates rise for the first time
since 2006.
Tepid Chinese economic data was largely shrugged off and
stocks rose as much as 1 percent in early European trade, but
the momentum gradually faded.
Wall Street looked set to open lower, according to index
futures ESc1 .
The combination of worries about slowing Chinese and global
growth and higher U.S. borrowing costs have weighed on markets
for weeks, although concern about the potential impact on
economic health means many economists see no "liftoff" in U.S.
interest rates until next year.
A Reuters poll on Friday showed a small majority of
forecasters still expect a Fed hike on Thursday, though
markets-based models suggest policy tightening will be delayed.
ID:nL1N11H1B3
The pan-European FTSEurofirst 300 index .FTEU3 , which
earlier gained almost 1 percent, was last down 0.2 percent for
the day.
Earlier, data showed growth in Chinese investment and
factory output in August lagged forecasts. After weak trade and
inflation data last week, this made it more likely that
third-quarter economic growth may dip below 7 percent for the
first time since the financial crisis. Only retail sales beat
forecasts. ID:nL4N11J0A9
Shares fell in China and Japan, although MSCI's main index
of Asia-Pacific stocks excluding Japan .MIAPJ0000PUS rose 0.6
percent.
China's Shanghai Composite index .SSEC dropped 2.8 percent
and the CSI 300 .CSI300 index of the biggest listed companies
in Shanghai and Shenzhen lost 2 percent. Tokyo's Nikkei .N225
closed down 1.6 percent.
The dollar hit an almost three-week low against a basket of
currencies .DXY but the index was last up almost 0.1 percent.
The greenback dipped 0.2 percent against the yen, which last
traded at 120.32 to the dollar. The euro EUR= was down 0.2
percent at $1.1322.
"Until Thursday I think the dollar will be moved by
strategic positioning (and) risk sentiment...rather than
fundamental input," said Commerzbank (XETRA:CBKG) FX strategist Esther
Reichelt in Frankfurt. "We have all the information we require
so far to have a view on the U.S. dollar and nothing before
Thursday is going to change any of that."
LIRA
In emerging markets, Turkey's lira TRYTOM=D3 fell to a
record low of 3.069 to the dollar
Oil prices fell more than 1 percent after the Chinese data
and on the prospect of dwindling demand, which analysts said was
likely to diminish further if U.S. interest rates rise.
Brent crude LCOc1 , the global benchmark, was down 57 cents
at $47.57 a barrel.
As stocks dropped, core government debt yields reversed
course and fell. German 10-year Bunds DE10YT=TWEB , the euro
zone benchmark, fell 1 basis point to 0.64 percent while U.S.
10-year Treasuries US10YT=RR yielded 2.18 percent, unchanged
from Friday's New York close.
Copper turned lower in London on worries over China and the
Fed. Three-month copper on the London Metal Exchange CMCU3
slipped 1.4 percent to $5,296.50 a tonne.
Gold XAU= fell to just above a one-month low, last trading
at $1,105.30 an ounce.