* Dollar starts week in positive territory
* Fed's Yellen may give rate hint on Friday
* Oil prices fall by around 3 percent (Recasts, updates prices)
By Abhinav Ramnarayan
LONDON, Aug 22 (Reuters) - World stocks edged lower and the dollar strengthened on Monday on expectations the Federal Reserve will give a signal this week that it is gearing up to raise U.S. interest rates.
An upbeat assessment of the U.S. economy's strength from Fed Vice Chairman Stanley Fischer on Sunday was seen raising the prospect of Fed chair Janet Yellen flagging up a rate rise at a meeting with the world's central bankers on Friday. dollar index, which tracks the greenback against a basket of six major currencies, rose 0.2 percent to 94.718 .DXY , pulling away from a six-week low hit last week after minutes of the Fed's last policy meeting showed rate-setters split on when to hike.
"Fischer didn't necessarily state when the Fed has decided to hike rates, but his remarks seemed to be alluding that a rate hike might be round the corner," said Craig Erlam, a senior market analyst at OANDA.
European stocks fell 0.11 percent .STOXX , having received a temporary boost in early trading by Syngenta after its proposed takeover by ChemChina was approved by U.S. regulators. .EU
Asian stocks closed lower, while U.S. stock futures ESc1 pointed to a weaker open for Wall Street shares.
Emerging stocks and currencies also fell broadly on Monday. MSCI's emerging equity index .MSCIEF slipped 0.6 percent to the lowest in more than 10 days after rallying for six straight weeks.
Investors are jittery about this week's gathering of central banking Jackson Hole, Wyoming on Thursday, with Yellen due to speak the following day.
Many emerging countries borrow heavily in U.S. dollars meaning an appreciation in the greenback makes it more expensive for them to service their debt.
Interest rate futures contracts indicate that the market is pricing in about 50/50 odds of a U.S. rate increase by the end of the year.
Oil prices fell on Monday as analysts said they doubted upcoming producer talks would rein in oversupply. O/R
Soaring exports of refined products from China also pressured prices, as this was seen as the latest indicator of an ongoing global fuel glut, traders said. crude futures LCOc1 were trading at $49.94 per barrel at 0712 GMT, down $1.56, or 3.07 percent.
Crude futures have risen almost $10 a barrel since early August on speculation that Saudi Arabia and other members of the OPEC will agree next month to a production freeze deal with non-OPEC producers led by Russia.
U.S. crude CLc1 fell 2.7 percent to $47.20 after gaining 9 percent last week, rising for a second straight week.
Gold fell on Monday to its lowest in more than a week as the dollar strengthened, before recovering slightly. Overall, spot gold XAU= was down 0.37 percent at $1,336 an ounce, having hit a low of 1,331.35 an ounce at one stage. GOL/
For Reuters new 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 (Editing by Toby Chopra)