* European U.S. stocks in positive territory
* FTSE hits fresh record high
* Sterling outlook still shaky
* Mexican peso hits record low
* Dollar falls on caution ahead of Trump press briefing (Updates throughout, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 10 (Reuters) - Stocks rose worldwide on Tuesday supported by a rally in commodities such as copper and precious metals, while the U.S. dollar fell on investor caution ahead of a news conference by U.S. President-elect Donald Trump on Wednesday.
European stock markets, which had opened broadly lower , edged back towards recent one-year peaks, while Wall Street shares traded higher.
Commodities such as copper gained on further signs of a pick-up in China's economy. Oil prices were lower on the day but were off their weakest levels of the previous session when they fell nearly 4 percent.
"A gauge of inflation in China rising has fit with the narrative of an improving world economy and that's positive for stocks," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
In the United States, the Dow Jones industrial average rose 0.22 percent to 19,930.29, while the S&P 500 was up 0.3 percent to 2,275.42. The Nasdaq Composite was up 0.5 percent to 5,556.79. It hit a record intraday high on Tuesday, extending its bullish run.
European stocks were also higher, with Europe's broad FTSEurofirst 300 index adding 0.2 percent at 1,439.87. Earlier, the index hit a record high.
The dollar, meanwhile, paused its rally on Tuesday, with the dollar index, which tracks the greenback versus a basket of six currencies, slipping 0.1 percent to 101.84.
Uncertainty ahead of Trump's comments, however, dampened demand for the dollar. Analysts also said traders were watching hearings for his choices for senior administration posts, which started on Tuesday with U.S. Senator Jeff Sessions, picked for attorney general.
The Trump factor also pressured the Mexican peso, which hit a record low against the dollar.
Britain's currency hit a fresh 10-week low against the dollar earlier in the session but recovered by midday in New York trading. It was last up 0.1 percent at $1.2166.
The outlook for the pound remained shaky, however, especially after weekend comments by Prime Minister Theresa May saying she was not interested in Britain keeping "bits" of its EU membership.
A revival in worries that Britain could be headed for a "hard Brexit", in which it chooses to take full control of immigration and give up access to the euro zone single market, reverberated across financial markets, lifting demand for safe-haven assets such as German government bonds and gold, which rose to its highest in over a month.
Oil prices fell, with Brent crude down 0.93 percent, at $54.43 a barrel. U.S. crude also fell 0.7 percent, to $51.59.
With little major U.S. data on the calendar, attention turned to a news conference on Wednesday by Trump, his first since winning the election.
"Cautiousness ahead of the news conference is turning into a bit of optimism, if you look at how Trump's tweets are playing out in the market," said Naeem Aslam, chief market analyst at Think Markets UK.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan rose 3.12 points or 0.71 percent, to 441.47.
Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Dhara Ranasinghe in London and Sam Forgione in New York; Editing by James Dalgleish