* Brexit uncertainty hits pound, euro, buoys dollar
* MSCI Asia Ex-Japan index down 0.5 pct
* But European share markets seen opening higher
* U.S. dollar hits new 16-month high
* Weak China data, U.S. Fed rate hike expectations weigh
* Oil prices surge on Saudi production cut plans
By Andrew Galbraith
SHANGHAI, Nov 12 (Reuters) - Sterling fell on Monday, helping to boost the dollar to a 16-month high, amid mounting doubts over whether Prime Minister Theresa May can come up with a Brexit deal that would win the backing of the European Union and her own party.
European shares were set to open higher, however, ignoring a broad flight from riskier assets seen in Asia, where equity markets wobbled on concerns about slowing global economic growth, particularly in China.
Financial spreadbetters expected London's FTSE .FTSE to open 0.8 percent higher, with Germany's DAX .GDAXI and France's CAC .FCHI seen up 0.5 to 0.6 percent.
Facing resistance in her cabinet, May was forced to abandon plans for an emergency cabinet meeting on Monday to approve a Brexit deal, the Independent reported. GBP=D4 fell three-quarters of a percent to $1.2877, with Brexit pessimism spreading to the euro, on growing investor worries over whether an orderly deal to leave the European Union would be achieved.
The retreat in the pound and euro helped push the dollar index .DXY , which tracks the greenback against a basket of six major rivals, to its highest level in 16 months. FRX/
In Asia, investors reduced exposure to riskier assets following weakness on Wall Street on Friday and ahead of a brace of Chinese activity data this week which could give further clues on the extent of its economic slowdown.
MSCI's broadest index of Asia-Pacific shares excluding Japan .MIAPJ0000PUS fell 0.5 percent, giving up early gains.
Japan's Nikkei stock index .N225 ended 0.09 percent higher.
The fall in the broad MSCI index appeared to run counter to regional benchmarks, with Australian shares .AXJO closing up 0.33 percent and Chinese blue chips .CSI300 gaining 1.2 percent after the government and regulators announced more measures to support the private sector.
But the stronger dollar helped to eat away at dollar-denominated indexes in the region, including the MSCI index tracking Korean shares .MIKR00000PUS , which fell 0.7 percent, shares in Taiwan .MITW00000PUS , which lost 0.1 percent and Indian shares .MIIN00000PUS which fell 0.8 percent.
Kevin Lai, chief economist for Asia ex-Japan at Daiwa Capital Markets, said markets were concerned about both China's economic growth in general and its significant debt burden.
"There's no way the economy can really can get back on a nice recovery path unless they can seriously compress the debt significantly ... all this deleveraging we've been talking about hasn't really delivered any results," he said.
E-commerce giant Alibaba (NYSE:BABA) Group Holding Ltd BABA.N added to the uncertain outlook in China, recording the slowest-ever annual growth in sales for its annual "Singles' Day" event.
Its sales outlook has weakened amid rising trade tensions between China and the United States that have taken a bite out of China's economy. index tracking consumer staples firms in China .CSI300CS was 0.4 percent lower.
RISKY BUSINESS
Riskier assets have been under intense pressure of late as fears of a peak in earnings growth added to anxiety about slowing global trade and investment.
A spike in U.S. bond yields, driven by the Federal Reserve's commitment to keep raising borrowing costs, has also shaken emerging markets as investors poured money into U.S. dollar assets.
The Dow Jones Industrial Average .DJI fell 0.77 percent on Friday, the S&P 500 .SPX lost 0.92 percent and the Nasdaq Composite .IXIC dropped 1.65 percent. .N
The yield on benchmark U.S. 10-year Treasury bonds US10YT=RR closed at 3.189 percent on Friday.
The Wall Street losses came after the Fed held rates steady earlier in the week but stayed on track to tighten policy next month. Fed's stance disappointed some investors who had hoped that October's rout in equities might have prompted policy makers to take a more cautious approach on interest rates.
"Markets are pricing in a 25bp hike in December, with data flow suggesting pipeline inflation pressures are building," analysts at ANZ said in a morning note.
Elsewhere in markets, the dollar rose 0.3 percent against the yen to 114.17 JPY= , while the euro EUR= fell 0.5 percent to $1.1279.
In commodities, Saudi Arabia's energy minister took some pressure off a sharp drop in oil prices last week with comments on Sunday that Riyadh plans to reduce its oil supply to world markets by 500,000 barrels per day in December, a global reduction of about 0.5 percent. jolted oil prices higher on Monday, with U.S. crude CLc1 rising 1.43 percent to $61.05 a barrel and Brent crude LCOc1 gushing 2.07 percent higher to $71.12 per barrel.
However, Saudi Arabia's supply cut may prove to be a temporary solution to falling prices as global growth slows, with two of the world's biggest economies - Germany and Japan - expected to report a contraction in output in coming days. surprises appear to be the main culprit, but concern that global demand is slowing may also be creeping into markets and weighing on risk appetite," the ANZ analysts said.
Spot gold XAU= fell on the strengthening dollar, dropping 0.19 percent to $1,206.88 per ounce. GOL/
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