(Adds U.S. stock market futures)
* Dollar recovers ground after five straight daily declines
* Hong Kong, China lead Asian gainers
* Europe-wide index steady, Wall St futures up 0.1 pct
* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh
By Patrick Graham
LONDON, Jan 18 (Reuters) - Stock markets steadied and the dollar recovered some ground on Wednesday after unease over how U.S. policy will develop under Donald Trump's presidency drove the currency to its weakest since early December.
Traders in Asia said shares were helped by hopes that the concern about a stronger dollar expressed by the U.S. President-elect at the weekend would benefit emerging markets where companies have borrowed heavily in dollars.
MSCI's ex-Japan Asia-Pacific shares index rose 0.3 percent, just shy of last Thursday's three-month high. Energy and cyclical stocks gained the most.
Short-covering helped, especially in China, where stocks tumbled more than 4 percent last week as traders took some money off the table before Trump's inauguration on Friday.
European stock markets were broadly steady after a choppy start. Banking shares came under pressure as investors chewed over details of the impact of regulatory fines on Deutsche Bank.
Futures showed Wall Street set to open less than 0.1 percent higher.
"Everything has taken a breather after the strong start in January for stocks," said Andy Sullivan, a portfolio manager with GL Asset Management UK in London. "The last few days have been choppier, and for the rally to be sustained, we need to see earnings growth start to come through."
MSCI's broadest index of global share prices reached its highest since mid-2015 on Friday and, driven by a bounce in expectations for U.S. inflation and growth since Trump's election, is within sight of all-time highs.
But worries about the new U.S. president's attitude to trade and politics, with relations with China in focus, have begun to show up more in some asset prices since the start of the year.
The dollar fell almost 1 percent on Tuesday and is on course for its worst two weeks since the election after Trump expressed concern about the dollar's strength in the context of trade relations with China.
It recovered around 0.3 percent on Wednesday, with eyes on a speech by the head of the Federal Reserve and U.S. inflation data for clues on the path of interest rates.
Sterling, which soared more than 3 percent on Tuesday after Prime Minister Theresa May's Brexit speech, fell back 0.7 percent.
"Everything is just a partial reversal of the price action yesterday," said RBC Capital Markets currency strategist Adam Cole, arguing that the dollar's weakness had been primarily driven by excessive positioning at the end of last year.
With doubts growing about the sustainability of the "Trump trade" - higher stocks and a stronger dollar - investors' favourite safe havens for capital have been in demand.
Gold was perched just off a two-month high around 1215 dollars per ounce. It is up nearly 8 percent in the last three weeks. The yen dipped half a percent as the dollar rose on Wednesday, but is still trading around its highest in seven weeks.
Oil prices fell by just over 1 percent, with benchmark Brent futures dipping to $54.70 per barrel and U.S. crude to $51.68..
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 (Editing by Larry King)