* U.S. share indexes down over 1.5 pct
* Wall Street set for worst weekly loss in a month
* Brent crude hits 7-year low; yuan at 4-1/2-yr low
* Dollar falls vs euro; Treasury prices up on safety bid
* U.S. 30-year yields hit over 6-wk low (Updates to close of European markets)
By Sam Forgione
NEW YORK, Dec 11 (Reuters) - Stock markets worldwide tumbled on Friday, Brent crude oil prices fell to seven-year lows and China's yuan currency sank on risk aversion ahead of a widely anticipated U.S. interest rate increase next week and worries over economic growth.
All three major U.S. indexes sank over 1.5 percent, while crude prices plunged amid global oversupply. The International Energy Agency said it sees the oil glut worsening in 2016 as demand slows and OPEC shows no signs of slowing production.
Brent crude was set for its biggest weekly percentage drop in over a year and U.S. crude was set for its biggest percentage decline in roughly a year.
China's yuan fell to its lowest in four-and-a half years on concerns over a slowdown of the world's second-biggest economy and expectations of a U.S. rate hike. Concerns grew that weakness in the yuan could weigh on the global economy and on companies with strong export ties to China.
"We have the yuan at 4-1/2 year lows and that is causing unease in China and abroad," said Jasper Lawler, market analyst at CMC, said.
In the spot market, the yuan CNY=CFXS hit 6.4564 against the U.S. dollar, its weakest level since July 2011.
Brent crude LCOc1 was down 4.48 percent at $37.95 a barrel after hitting $37.36, its lowest since December 2008. U.S. crude CLc1 dropped 2.86 percent to $35.71 per barrel after hitting $35.35, its lowest since February 2009.
On Wall Street, the three major stock indexes were on track for their worst weekly drop in a month.
The Dow Jones industrial average .DJI was down 1.55 percent, to 17,302.09. The S&P 500 .SPX was down 1.67 percent, at 2,018.05. The Nasdaq Composite .IXIC was off 1.85 percent, at 4,951.92.
BOND PRICES, GOLD GAIN
European shares slipped to their lowest in two months, with a measure of top regional shares posting its biggest weekly drop in three and a half months. Europe's broad FTSEurofirst 300 index .FTEU3 ended 2.14 percent lower at 1,397.49.
MSCI's all-country world equity index .MIWD00000PUS , which tracks shares in 45 nations, was down 1.44 percent at 393.61.
The dollar fell against the euro as concerns over weak commodity prices and the yuan's slump overshadowed solid U.S. retail sales data. urn:newsml:reuters.com:*:nL1N1400TA Those concerns were unsupportive of further monetary policy tightening by the Fed beyond December's heavily anticipated rate increase.
"These external macro factors could limit the scope of Fed hikes next year and that is weighing on the dollar," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
The dollar index .DXY , which tracks the greenback versus a basket of six currencies, was last down 0.39 percent, to 97.557.
U.S. Treasury debt prices surged on safe-haven demand.
Benchmark 10-year U.S. Treasury notes US10YT=RR were last up 24/32 in price to yield 2.153 percent, from a yield of 2.238 percent late Thursday. Those yields hit 2.148 percent, their lowest in over a week, while 30-year yields hit a more than six-week low of 2.886 percent.
Gold prices bounced from earlier losses. Spot gold XAU= was up $4.46 at $1,075.60 an ounce.