GLOBAL MARKETS-Stocks hit pause, dollar slips with China/US trade talks in focus

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World stocks barely higher ahead of key trade talks

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U.S. deal with UK this week was first since Trump tariff pause

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China/U.S. weekend negotiations in focus

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Bitcoin touches highest since January; oil rises 1%

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U.S. dollar, Treasury yields pull back

(Updates to late afternoon, adds oil settlement)

By Sin?ad Carew and Nell Mackenzie

NEW YORK/LONDON, May 9 (Reuters) - MSCI's global equities index was barely higher on Friday while Wall Street trading was choppy and the dollar lost ground as a U.S. trade deal with Britain fueled guarded optimism for U.S. tariff negotiations with China and other countries.

While U.S. President Donald Trump pushed back against the idea that UK deal could be a template for other trade negotiations, traders await a meeting Saturday in Geneva, Switzerland, between the U.S. Treasury Secretary and chief trade negotiator with China's economic tsar.

India on Friday offered to slash its tariff gap with the U.S. to less than 4% from nearly 13% now, in exchange for an exemption from "current and potential" tariff hikes, Reuters reported.

MSCI's broadest index of world shares rose rose 1.14 points, or 0.13%, to 846.99 while U.S. indexes were close to flat.

Trump said setting 80% tariffs on Chinese goods "seems right". It was his first suggestion of an alternative to the 145% levies he has imposed.

Signaling the U.S. is willing to make any cut on tariffs was incrementally positive, according to Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management.

"With the Geneva meeting this weekend, there's a little bit of anxiety and certainly a fair amount of profit taking given the strength we've had," said Michael James, managing director at Rosenblatt Securities adding that people wary of anything potentially negative coming from the meetings.

"We've all become accustomed in the last month to the impact negative and positive from any social media headlines coming from the White House. While its certainly been more pleasant the last few weeks with the market trending higher ... there's still a fair amount of uncertainty," James said.

On Wall Street, at 02:46 p.m. the Dow Jones Industrial Average fell 86.14 points, or 0.22%, to 41,279.12, the S&P 500 fell 0.84 points, or 0.03%, to 5,662.35 and the Nasdaq Composite fell 7.29 points, or 0.04%, to 17,920.50.

Earlier the pan-European STOXX 600 index finished up 0.44% while Germany's Dax stock index ended up 0.63% for a record closing high.

In currencies, the dollar was down on the day but eying a weekly gain against major currencies, including the Swiss franc, yen and euro on optimism about upcoming U.S.-China talks.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,

fell 0.29% to 100.36.

The euro up 0.25% on the day at $1.1255 and against the Japanese yen, the dollar weakened 0.42% to 145.29. Against the Swiss franc, the dollar weakened 0.11% to 0.831 while the Swedish crown strengthened 0.29% versus the dollar to 9.707.

In cryptocurrencies, bitcoin eyed its fourth straight day of gains, touching its highest level since January after Thursday's advance, which was the biggest in a month.

Bitcoin gained 0.67% to $103,317.75. Ethereum rose 7.22% to $2,342.23.

U.S. Treasury yields slipped, with thinner volume than usual and sentiment still uncertain, as investors looked ahead to talks between the Trump administration and China.

The yield on benchmark U.S. 10-year notes fell 0.2 basis points to 4.371%, from 4.373% late on Thursday.

The 2-year note yield, which typically moves in step with Federal Reserve interest rate policy expectations, fell 1.6 basis points to 3.879%, from 3.895% late on Thursday.

Mike Venuto, co-founder and chief investment officer at Tidal Financial Group in New York, was not optimistic about the upcoming China talks.

"It will take more time than we want to. I would expect further uncertainty because trade deals even when you have good partners which are working in good faith will take a year to work out," he said.

"What we have seen so far is simply symbolic. There's a lot of wood to chop. People are just looking for any piece of good news that is more or less sustainable."

In commodities, oil prices rose on Friday with investors pinning hopes on the upcoming U.S./China trade talks.

U.S. crude settled up 1.85% or $1.11 at $61.02 a barrel and Brent rose to $63.91 per barrel, up 1.7%, or $1.07 on the day.

Gold prices rose as the dollar weakened, while investors digested the remarks from Trump ahead of the weekend talks.

Spot gold rose 0.98% to $3,337.69 an ounce. U.S. gold futures rose 1.18% to $3,335.50 an ounce.