* Rally runs out of steam after Wall Street scales record peaks
* Euro suffers, dollar gains after disappointing data
* German, French, eurozone PMIs below expectations
* China's yuan scales to seven-month high
By Karin Strohecker
LONDON, Aug 21 (Reuters) - Sombre economic numbers including euro zone data pointing to a faltering recovery doused global stock market gains on Friday and saw the euro recoil further from recent peaks.
Global equities dipped into the red .MIWD00000PUS and the pan-European STOXX 600 .STOXX gave away early gains to fall 0.6%, while U.S. futures ESc1 NQc1 pointed to a 0.4% drop at the open.
The loss of momentum came after fresh numbers painting a muted economic outlook, with purchasing managers' index releases from France and Germany as well as the wider euro zone falling short of expectations, flagging slowing momentum in the recovery. eurozone flash PMIs for August paint a rather muted picture for the single currency area's nascent economic recovery," said Moritz Degler, senior economist at Oxford Economics.
"The survey contains some strong evidence that the recovery has slowed in August, particularly in the services sector," Degler added.
Analysts pointed to rising infection numbers having tempered economic activity. On Thursday, France saw a post-lockdown record in new infections, while countries across the region imposed fresh travel restrictions. that Pfizer (NYSE:PFE) PFE.N reported positive early data from a potential COVID-19 vaccine and could be on track to seek regulatory review by October did little to brighten the mood. STIMULUS
European bourses had started the day on a brighter note, following gains in Asia after U.S. tech shares closed higher on Thursday. The S&P 500 has rallied 54% from its March low in a world awash with monetary and fiscal stimulus, but money managers are questioning the future trajectory.
"We think equity markets, certain credit markets, and the U.S. dollar have yet to fully reflect the long-term impact of ultra-loose Fed policy," said Mark Haefele, chief investment officer at UBS Global Wealth Management.
But it wasn't just European data which delivered a dampener.
Overnight, clouds returned to the U.S. labour market outlook, with weekly jobless claims back over a million to put the total number of Americans on unemployment benefits at 28 million.
The Philadelphia Federal Reserve's business index also missed expectations and together the weak readings pushed down nominal U.S. yields and dragged on the dollar. Benchmark U.S. 10-year debt US10YT=RR yields were creeping lower to stand at 0.6347%.
In currency markets, the dollar index .DXY jumped 0.8%, on track to end what would have been a ninth consecutive weekly decline. Meanwhile the euro extended losses to drop as much as 0.8% to $1.1768 EUR=EBS , its lowest level in nearly 10 days.
The Japanese yen JPY= hovered at 105.53 after an inflation miss supported real yields, while China's yuan surged to a seven-month high as traders bet on Chinese growth.
Sterling weakened GBP= and was last down 0.8% at $1.3108 amid scant progress in Brexit talks between Brussels and London ahead of a year-end deadline to reach a deal. commodity markets, oil prices were on track for a small weekly loss, with Brent crude futures LCOc1 slipping to $44.29 a barrel and U.S. crude future CLc1 to $42.24 a barrel.
Gold XAU= was a touch softer at $1,918.3 an ounce.
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