SINGAPORE (Reuters) -Global stocks and the dollar slipped on Thursday as investors sized up a benign U.S. inflation report and the fragile trade truce between Washington and Beijing, while rising tensions in the Middle East and lingering tariff anxiety dented risk sentiment.

European stocks looked set to open lower, with futures tracking Germany's DAX and London's FTSE 100 down 0.8% and 0.4%, respectively. Contracts tracking Wall Street's S&P 500 pointed to a lacklustre start as well.

Attention in financial markets this week has been on the U.S.-China trade talks which culminated in a framework agreement that would remove Chinese export restrictions on rare earth minerals and allow Chinese students access to U.S. universities.

"We made a great deal with China. We're very happy with it," said U.S. President Donald Trump. Markets though were guarded in their response, awaiting fuller, concrete details of the agreement and remained wary of another flare up.

Stocks in Europe and the U.S. were also taking a breather after a rally over the past few sessions brought them closer to record-high levels logged earlier this year.

Adding yet another dose of uncertainty in the markets, Trump said the U.S. would send out letters in one to two weeks outlining the terms of trade deals to dozens of other countries, which they could embrace or reject.

"Markets may have no choice but to respond to Trump's tariff threat-even if it's just posturing to bring others to the table. The gap between "risk-on" positioning and real-world risks has stretched too far," said Charu Chanana, chief investment strategist at Saxobank.

In Asia-Pacific, MSCI's broadest index tracking stocks in the region excluding Japan slipped 0.2%, after hitting a three-year-high on Wednesday, while Japan's Nikkei slipped 0.5%.

Chinese and Hong Kong stocks were also taking a pause after touching multi-week highs in the previous session. [.SS]

Trump's erratic tariff policies have roiled global markets this year, prompting hordes of investors to exit U.S. assets, especially the dollar, as they worried about rising prices and slowing economic growth.

The euro, one of the beneficiaries of the dollar's decline, touched a seven-week high and was last at $1.1525. The Japanese yen was 0.4% firmer at 143.85 per dollar.

That pushed the dollar index, which measures the U.S. currency against six others, to its lowest level since April 22. The index is down 9% this year. [FRX/]

INFLATION WORRIES

Data on Wednesday showed U.S. consumer prices increased less than expected in May, but inflation is expected to accelerate in the coming months on the back of the Trump administration's import tariffs.

AMP Capital's head of investment strategy and chief economist, Shane Oliver, said the higher prices will flow through either in the form of higher inflation or lower profit margins.

"I suspect it's probably going to be a combination of the two. Therefore it makes sense for the Fed to wait and see what happens rather than rushing into a rate cut."

Later in the day, the focus will be on a producer inflation report as some of the components feed into the Fed's preferred inflation gauge - the Personal Consumption Expenditure Index.

Policymakers are widely expected to keep rates unchanged next week and traders instead are pricing in a 70% chance of a quarter-point reduction in the Fed policy rate by September. [0#USDIRPR]

In the UK, investors assessed a report that showed economic output contracted by a worse-than-expected 0.3% in April on a monthly basis.

In commodities, oil prices were pinned at two-month highs, close to $70 a barrel, on worries of supply disruptions in the Middle East after Iran said it will strike U.S. bases in the region if nuclear talks fail and conflict arises with Washington. [O/R]

Gold prices also got a boost from safe-haven flows, with spot gold up 0.6% at $3,372.29. [GOL/]

(Reporting by Ankur Banerjee and Johann M Cherian; Editing by Shri Navaratnam and Muralikumar Anantharaman)