*

Oil hovers near 4 1/2-month peak on risks of supply shock

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Dollar firm on safe-haven demand despite mixed signals

from Fed

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Swiss franc steady after SNB cuts rates to 0%

(Updates throughout)

By Kevin Buckland, Johann M Cherian and Amanda Cooper

TOKYO/LONDON, June 19 (Reuters) - Global stocks fell and

the dollar rose on Thursday, reflecting investors' preference

for perceived safe havens as concerns mounted over possible U.S.

involvement in the Israel-Iran air war, which has ignited a

rally in the oil price this week.

On the geopolitical front, President Donald Trump kept the

world guessing about whether the United States would join

Israel's bombardment of Iranian nuclear sites, telling reporters

outside the White House on Thursday; "I may do it. I may not do

it."

A flurry of central bank decisions in Europe highlighted

how Trump's erratic approach to trade and tariffs has

complicated the job of central bankers in setting monetary

policy.

In Europe, stocks fell for a third day, leaving the STOXX

600 down nearly 2.5% on the week, set for its biggest

week-on-week decline since the tariff-induced turmoil of April.

U.S. S&P 500 futures fell 0.5%, although most U.S.

markets - including Wall Street and the Treasury market - will

be closed on Thursday for a public holiday.

"Market participants remain edgy and uncertain," said Kyle

Rodda, senior financial markets analyst at capital.com.

Speculation was rife "that the U.S. will intervene,

something that would mark a material escalation and could invite

direct retaliation against the U.S. by Iran," he added.

"Such a scenario would raise the risk of a greater

regional conflict, with implications for global energy supply

and probably economic growth."

Much of the recent nervousness in markets has been centred

around crude supply shocks from the Middle East, which has

driven the price of crude oil up by 11% in a week. Brent crude

rose by as much as nearly 1% to $77.40 a barrel, close

to its highest since January.

Gold, which tends to struggle when the dollar gains,

pared earlier losses to trade at $3,372 an ounce, up 0.1% on the

day.

The dollar itself rose broadly, leaving the euro

down 0.1% at $1.1466 and the Australian and New Zealand

dollars - both risk-linked currencies - down 0.7% and 1%,

respectively.

CENTRAL BANK POLICY

Overnight, the Federal Reserve delivered mixed signals to

markets. Much to Trump's displeasure, policymakers held rates

steady as expected and retained projections for two

quarter-point rate cuts this year.

However, Fed Chair Jerome Powell struck a cautious note

about further easing ahead, saying at his press conference that

he expects "meaningful" inflation ahead as a result of Trump's

aggressive trade tariffs.

Strategists at MUFG said the Fed "is underestimating the

weakness in the economy that was present before the tariff

shock, specifically, almost ignoring the cracks that have been

visible in the labor market for years".

The Bank of England left UK rates unchanged, as expected,

and policymakers said trade policy uncertainty would continue to

hurt the economy, triggering a drop in the pound.

The

Norges Bank

surprised markets with a quarter-point cut that weighed on

the crown currency, while the

Swiss National Bank cut interest rates to zero, as expected,

but the fact it did not go below zero gave the franc a

lift, leaving the dollar down 0.1% at 0.8184 francs.

In commodity markets, the

price of platinum

hit its highest in almost 11 years, near $1,300 an

ounce, driven partly by what analysts said was consumers seeking

a cheaper alternative to gold.

(Additional reporting by Kevin Buckland in Tokyo and Johann M

Cherian in Bengaluru, Editing by Shri Navaratnam, Bernadette

Baum and Ed Osmond)