* Asia ex-Japan stocks set to end the week lower
* Europe poised for flat to lower open
* Traders expect dollar rally to resume on U.S. growth
* Oil surrenders some gains before Christmas weekend
* Gold climbs as risk appetite ebbs
By Nichola Saminather
SINGAPORE, Dec 23 (Reuters) - Asian stocks retreated in subdued trade on Friday after Wall Street took a breather from its surge since the U.S. election, while the dollar hovered below the 14-year high set earlier this week.
European markets look set to open flat to slightly lower, with financial spreadbetter IG Markets expecting Britain’s FTSE 100 to open down 0.1 percent on a shortened trading day, and Germany’s DAX and France’s CAC 40 to start the day little changed.
MSCI’s broadest index of Asia-Pacific shares outside Japan , fell 0.4 percent to a five-month low. It was heading for a drop of 1.8 percent in its second consecutive week of declines.
China’s CSI 300 index dropped 0.7 percent, dragged lower by brokerage and insurance shares, on expectations regulators will tighten supervision over online insurance products. The index was on track to lose 1.1 percent for the week.
Hong Kong’s Hang Seng retreated 0.5 percent, and was poised for a similar weekly loss.
Japan’s Nikkei, closed for a holiday on Friday, edged up 0.1 percent for the week. The index has posted seven straight weeks of gains, its longest winning streak since early 2013, boosted by the yen’s weakness in the face of a surging dollar.
Overnight, U.S. equities posted their first back-to-back daily declines of the month in light trading ahead of the Christmas weekend. U.S. indices fell as much as 0.4 percent on Thursday.
“Santa has taken a leave of absence into the end of the week,” Jingyi Pan, market strategist at IG in Singapore, wrote in a note. “Asian indices could remain depressed into the end of the year.”
Wall Street stocks have been on a tear since the U.S. election on expectations that Donald Trump’s promised fiscal stimulus will boost economic growth and company profits. The Dow Jones Industrial Average has surged 8.7 percent since before the election results were announced.
Markets globally appeared be on pause for the holidays, with the MSCI World index down 0.1 percent on Thursday, and little changed on Friday.
Europe’s STOXX 600 index closed down 0.2 percent on Thursday, with the broader downtrend offsetting expectations of a government bailout for troubled Italian lender Monte dei Paschi di Siena, which closed at a record low on Thursday.
Early on Friday, the Italian government approved a rescue of the world’s oldest bank, after it failed to raise enough money from private investors to stay afloat.
Prime Minister Paolo Gentiloni told reporters his cabinet had authorised creation of a 20-billion-euro ($21 billion) fund to prop up Italy’s embattled banking sector, with Monte dei Paschi expected to be first in line for help.
Deutsche Bank and Credit Suisse said separately on Friday they had agreed to deals of $7.2 billion and $5.3 billion respectively with the U.S. over their sales of mortgage securities in the run up to the 2008 financial crisis.
In the foreign exchange markets, the dollar was subdued, having scaled its highest point since December 2002 on Tuesday. It has since hovered below that level, with traders unwilling to make any big moves ahead of the holiday weekend.
The dollar index, which tracks the greenback against a basket of six global peers, slipped 0.1 percent to 102.98, down from Tuesday’s 103.65 peak. It is poised to end the week flat.
The dollar inched down 0.2 percent against the yen to 117.355, and was on track for a 0.55 percent loss for the week.
Still, most traders retain positive bets on the U.S. currency, particularly after upbeat economic data including business spending, and an upward revision to third-quarter economic growth on Thursday.
“The trend is definitely for a stronger dollar,” Stephen Casey, senior currency trader at Cambridge Global Payments in New York. “Any dip in the dollar will a buying opportunity.”
The euro edged up 0.2 percent to $1.0453 on Friday, on track for a flat end to the week.
Sterling was little changed at $1.229, on track for a weekly slide of 1.6 percent.
The muted investor sentiment weighed on the Australian dollar, which dropped 0.1 percent to $0.7207, fractionally above a seven-month low touched Thursday and repeated Friday.
Oil prices slipped as investors took profits after Thursday’s gains driven by strong U.S. economic data and optimism that crude producers would keep to their pledge to limit output.
U.S. crude pulled back 0.5 percent to $52.69 a barrel on Friday, but remains on track for a 1.5 percent gain for the week.
Global benchmark Brent crude fell 0.4 percent to $54.85, set to close the week 0.7 percent lower.
As risk appetite ebbed on Friday, the decline in gold prices, which have languished in the wake of the dollar’s rally, reversed. Spot gold climbed 0.3 percent to $1,131.79 an ounce, shrinking its weekly loss to 0.2 percent. (Reporting by Nichola Saminather; Additional reporting by Wayne Cole; Editing by Eric Meijer and Richard Borsuk)