* Dollar follows U.S. yields to highest levels in almost a year
* Yen hits lowest since June, euro since January
* Yuan fixed at lowest since before 2010 launch of offshore market
* Mexican peso pulls back as Trump waters down border wall pledge (New throughout after start of European trade)
By Patrick Graham
LONDON, Nov 14 (Reuters) - The dollar surged to an 11-month high against a basket of major currencies on Monday, resuming gains driven by rising U.S. bond yields and expectations for inflation since Donald Trump's U.S. election victory.
China's yuan lost another third of a percent to fall to its weakest since before the launch of its offshore market in 2010, while the yen and the euro both sank by almost another full percentage point to multi-month lows.
Friday had seen a halt in the bond market sell-off that has been the clearest global reaction to Trump's election, but U.S. 10-year yields rose by another 11 basis points on Monday.
"I think people were just pausing for breath," said Jane Foley, a strategist with Rabobank in London.
"The rise higher in yields, coupled with the fact that people have been reducing dollar longs for most of this year, has really played into this. It is really setting the tone for all other markets."
The euro fell to $1.0752, its lowest since January. The dollar index .DXY rose 0.9 percent to 99.873, its highest since last December.
At the heart of the move are expectations that Trump's administration would both boost spending and put more restrictions on trade, both steps that could put an end to the low inflation which has ruled the past decade.
The 10-year Treasury note yield US10YT=RR rose to a 10-month high of 2.2 percent in Asia.
The latest IMM report showed "long" bets on the dollar gaining had been rebuilt over the past month but they still remain around half the levels recorded during last year amongst asset managers and leveraged funds.
"What was expected to be a gradual dollar rise is going much faster than expected after Trump's win," said Koji Fukaya, president of FPG Securities in Tokyo. "With the possibility of reflationary policies being enacted, the market is bracing for a new bull phase under a different set of rules."
Investors are still struggling to grasp all the implications the new president may have for global balances. For the Bank of Japan, so far, it has eased one of their major headaches: the constant global pressure for a stronger yen.
Japanese third-quarter growth data also provided some encouragement, expanding for a third consecutive quarter at an annualised rate of 2.2 percent.
"Sharply higher US yields are providing an initial boost for USD/JPY while concerns over more protectionist US trade policies which would favour a stronger yen are judged as less important for now," said Lee Hardman, currency analyst with Japan's MUFG in London.