GLOBAL MARKETS-Shares lock in bumper Q1, dollar eyes best week of year

* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh

* Global Assets in 2017 http://reut.rs/2ne9sjH

* Wall Street seen falling 0.2 percent after three days of rises

* Rand falls 1.5 percent after finance minister sacked

* Oil licks wounds after near 7 percent quarterly fall

By Marc Jones

LONDON, March 31 (Reuters) - World stocks dipped on Friday as investors locked in some of the more than 6 percent gain that has given them their best start to a year since 2012, while the dollar inched towards what could be its strongest week of 2017 so far.

Asian and European shares saw profit-taking as traders squared up for the quarter, though there was plenty still going on, not least in South Africa where the sacking of its respected finance minister sent the rand tumbling again.

Wall Street was expected to open lower having recently lost some of the swagger that had seen it set multiple all-time highs and a tidy 5.8 percent quarterly gain.

The dollar was on the rise though after U.S. growth data, talk of as many as three more Federal Reserve rate hikes this year and the best Chinese manufacturing data in nearly five years, though even that couldn't prevent commodity markets wilting.

Oil was back under $53 a barrel, metals were down 1 percent and Europe's Basic Resources (Frankfurt: W8Z.F - news) index, where big miners are listed, fell 1.7 percent to leave London's FTSE and the pan-European STOXX 600 index down 0.5-0.6 percent.

The latter was still on track for a 5 percent rise between January and March for a third straight quarterly gain, though emerging markets have been even bigger winners.

MSCI (Frankfurt: 3HM.F - news) 's EM stocks index is up 12.5 percent on a dollar-adjusted basis. http://reut.rs/2ne9sjH

Against a basket of the world's other major currencies the dollar was up 0.1 percent and close to a 1 percent weekly gain that would be its best in an otherwise lacklustre year.

Over the quarter the greenback has fallen 1.7 percent, its worst showing in a year, on doubts that U.S. President Donald Trump was not prioritising - and did not have the necessary power to push through Congress - the economic reforms that had driven the dollar to 14-year highs at the start of the year.

"We are relatively optimistic on global growth but we think the cyclical trade has rotated away from the Trump trade and near-term U.S. fiscal stimulus," said Schroders (Frankfurt: 929969 - news) ' multi-asset Portfolio Manager Angus Sippe.

"We are now more optimistic on the euro zone," he said, adding he was also marginally short the dollar.

The euro held its own at just under $1.07 as data showed inflation in the euro zone had slowed in March by far more than the economists had expected, driven down mostly by a deceleration of energy price rises.

Meanwhile the European Union laid out its Brexit negotiating terms, saying if Britain wanted to start trade deal talks this year it would first have to pay ten billions of euros and give residency rights to the 3 million EU citizens living in the UK.

There were tentative signs too that the euro zone's weakest members would be hit the hardest by an imminent scaling back of the European Central Bank's asset purchase programme.

The yield, an indication of borrowing costs, on bonds of southern euro zone states including Portugal and Italy headed higher in the final day of trading before the ECB cuts its monthly debt purchases to 60 billion euros from 80 billion.

Top ECB policymaker Benoit Coeure emphasised the bank would tread carefully with any further policy changes.

GOLD STANDARD

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan retreated 0.55 percent after its 12.5 percent charge over the quarter.

Hong Kong shares fell 0.6 percent, but were still headed for a 9.8 percent quarterly jump and China's CSI (Shanghai: 600158.SS - news) 300 index added 0.4 percent, putting it on track for a 4.3 percent quarterly rise.

"Asia saw some pretty healthy profit-taking after a few sessions of solid gains," said James Woods, global investment analyst at Rivkin Securities in Sydney.

Next (Frankfurt: 779551 - news) week promises to be an interesting start to the second quarter.

Trump and Chinese President Xi Jinping will meet in Florida and the U.S. president has set the tone for a tense few days by tweeting that Washington could no longer tolerate massive trade deficits and job losses.

He will also sign executive orders on Friday aimed at identifying abuses that are causing the deficits and clamping down on non-payment of anti-dumping and anti-subsidy duties on imports, his top trade officials said.

China's Vice Foreign Minister Zheng Zeguang said on Friday that it does not have a policy to devalue its currency to promote exports, and neither does it seek a trade surplus with the United States.

"The dialogue emanating from that is going to help set the tone of the relationship between the U.S. and China and these days it goes beyond trade. There is a lot to discuss geopolitically, not least North Korea," said PIMCO portfolio manager Yacov Arnopolin.

In commodities, Brent oil and U.S. crude dipped to $52.91 a barrel and $50.35 a barrel, having zipped higher on Thursday after Kuwait backed an extension of OPEC production cuts.

Oil was heading for a 6.8 percent loss for the quarter, though. In contrast gold which was at $1,241.81 has gained nearly 8 percent since the start of the year.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

(Reporting by Marc Jones; editing by Mark Heinrich and John Stonestreet)