* China's yuan on track for biggest monthly decline since 1994
* Wall St stocks lower; German real estate lifts European shares
* Euro falls on expectations of aggressive ECB easing
By April Joyner
NEW YORK, Aug 30 (Reuters) - Hopes for a thaw in the U.S.-China trade war helped a gauge of global stocks edge higher on Friday despite weakness on Wall Street, though caution over pending U.S. tariffs on Chinese goods put the yuan on track for its biggest monthly decline in 25 years.
Statements from U.S. President Donald Trump and China's commerce ministry on Thursday that the countries were engaged in trade talks brought some respite to equities, which have been roiled by the escalating trade war. pan-European STOXX 600 .STOXX ended 0.7% higher, helped by a surge in German real estate shares. The MSCI All-Country World Index .MIWD00000PUS rose 0.19%.
On Wall Street, the Dow Jones Industrial Average .DJI fell 22.89 points, or 0.09%, to 26,339.36, the S&P 500 .SPX lost 4.5 points, or 0.15%, to 2,920.08 and the Nasdaq Composite .IXIC dropped 36.01 points, or 0.45%, to 7,937.38.
U.S. markets will be closed on Monday for the Labor Day holiday.
Despite the day's gains, MSCI's gauge of global stocks was on track for its second monthly loss of the year and its biggest August percentage decline since 2015.
Some market watchers expressed caution given the fluctuating rhetoric. Despite recent conciliatory comments, the Trump administration on Sunday is scheduled to begin collecting 15% tariffs on more than $125 billion in Chinese imports, including smart speakers, Bluetooth headphones and many types of footwear.
China's yuan CNH= fell 0.30% to 7.1637 per dollar and was on track for its weakest month since Beijing's currency reform in 1994. trade developments ahead of the re-opening of U.S. financial markets on Tuesday could sway sentiment, said Ken Polcari, managing principal at Butcher Joseph Asset Management in New York.
"Tariffs are being implemented on Sept. 1 from the U.S.," Polcari said. "The fact is (China) very well could retaliate, and no one should be surprised if they do. With an extra day of no trading, it could be that kind of news that causes a disruption to the market."
U.S. Treasury yields treaded water, with the yield curve between 2-year and 10-year notes US2US10=TWEB still inverted, seen as a signal that a recession is likely in one to two years. 10-year Treasury notes US10YT=RR last rose 1/32 in price to yield 1.5129%, from 1.516% late on Thursday.
Italian bond yields registered one of their biggest monthly decline in more than six years after the anti-establishment 5-Star Movement and opposition Democratic Party reached an agreement on a coalition government. currencies, the euro EUR= reached its weakest level since May 2017 as expectations grew for aggressive easing by the European Central Bank following weak economic data on Thursday. The euro was last 0.73% lower at $1.10. dollar index .DXY rose 0.43%.
The safe-haven Japanese yen JPY= rose 0.23% to 106.26 per dollar and was on track for its biggest monthly gain since May.
Sterling GBP= fell 0.34% to $1.2146 ahead of a crucial period for the British parliament before it is suspended ahead of Britain's scheduled exit from the European Union on Oct. 31. commodities, spot gold XAU= fell 0.33% to $1,522.41 an ounce but was set for its fourth straight month of gains. Silver XAG= rose 0.52% to $18.33 and was on track for its biggest monthly percentage gain since June 2016. prices fell on concerns that disruption from Hurricane Dorian, headed for Florida, could dampen demand. U.S. crude CLc1 settled 2.84% lower at $55.10 a barrel, while Brent LCOc1 settled at $60.43 a barrel, down 1.06% on the day. stocks in Aug