* Dollar eases after hitting 14-year highs
* Oil prices jump on signs producers to comply with cuts
* European shares set 11-month high
* U.S. stocks down slightly in afternoon trading (Adds quote, European shares' close, updates prices)
By Caroline Valetkevitch
NEW YORK, Dec 16 (Reuters) - The dollar and U.S. stocks dipped on Friday, taking a breather after this week's big moves after the Federal Reserve signaled a faster pace of U.S. interest rate increases next year.
U.S. Treasury debt yields inched higher, continuing a weeks-long trend. Markets appeared to be adjusting for what is expected to be a quiet holiday period for economic data.
"We took direction from the Fed, but over the next couple of weeks we'll see some more cleaning up of positions heading into the year-end," said Tom Simons, money market economist at Jefferies & Co in New York.
Bond yields have surged and the dollar has rallied since the Fed on Wednesday raised rates for the first time in a year and its forecasts showed three more rate increases in 2017. The dollar has since strengthened to almost parity with the euro.
U.S. stocks, which fell on Wednesday following the Fed meeting but bounced back on Thursday, eased again on Friday and the S&P 500 was on track for a slight weekly decline.
The Dow Jones industrial average was down 2.85 points, or 0.01 percent, to 19,849.39, the S&P 500 lost 3.68 points, or 0.162686 percent, to 2,258.35 and the Nasdaq Composite dropped 15.82 points, or 0.29 percent, to 5,441.04.
"For the next two weeks, we have somewhat of an aimless market, where people are getting ready to close the books for the year," said Mohannad Aama, managing director at Beam Capital Management in New York.
World stocks as measured by the MSCI world equity index , which tracks shares in 46 countries, were up slightly.
European shares closed up 0.3 percent. Merger and acquisition speculation around drug maker Actelion and insurer Generali helped the benchmark index to set an 11-month high earlier in the session.
In the foreign exchange market, the dollar index, which measures the greenback against a basket of six major rivals, was last at 102.82, down 0.2 percent. It hit a 14-year high of 103.560 on Thursday.
In afternoon U.S. trading, 10-year Treasury prices were down 1/32, yielding 2.584 percent, up from Thursday's 2.578 percent. On the week, 10-year yields have gained nearly 13 basis points.
In commodities, a strong dollar and signs of mounting supply in London Metal Exchange warehouses dragged copper prices lower. Other industrial metals also slipped.
Benchmark LME copper was down 1.7 percent at $5,633 a tonne.
Oil prices jumped as producers showed signs of adhering to a global deal to reduce output. Brent crude futures were trading at $55.20 per barrel, up 2.2 percent, while U.S. crude was up 1.8 percent at $51.83.
For Reuters new Live Markets blog on European and UK stock markets see reuters://realtime/verb=Opener=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets (Additional reporting by Gertrude Chavez-Dreyfuss in New York and Tanya Agrawal; Editing by James Dalgleish and Nick Zieminski)