* U.S. dollar edges down on Friday but up for the week
* Wall Street zigzags, European shares edge lower
* Crude oil edges up on strong German sentiment data
* U.S. Treasuries mixed, 10-year drops, 30-year rises (Updates with New York close, adds comment, byline)
By Daniel Bases and Herbert Lash
NEW YORK, Oct 22 (Reuters) - World stocks and the U.S. dollar see-sawed on Friday as finance and central bank chiefs from the Group of 20 leading economies struggled to manage currency and trade imbalances, leaving investors to navigate choppy markets
Uncertainty about the outcome of the G20 meeting, who are seeking a common path to manage global trade, prompted some investors to moderate their dollar-selling until the gathering in South Korea ends this weekend.
On Wall Street, the S&P 500 and the Nasdaq rose while the Dow fell. European shares closed slightly off six-month highs touched in the previous session.
The greenback, while ending the day slightly lower, did snap a five-week losing streak against major currencies.
The United States struggled on Friday to win backing for a proposal to set limits on external imbalances as a way of pressing countries with surpluses such as China to let their exchange rates rise. For details see: [ID:nTOE69L00U]
U.S. Treasury Secretary Timothy Geithner proposed limiting surpluses and deficits on the current account -- the broadest measure of trade in goods and services -- to 4 percent of gross domestic product, according to Japan's finance minister.
But the plan met with a cool reception, and big exporting countries, including Germany, that habitually run chunky trade surpluses led the opposition. [ID:nLDE69L159]
Many emerging market policy-makers blame lax U.S. policies for the global financial crisis, and they fear Washington is prepared to debase the dollar by flooding the banking system with cash to try to breathe life into a sluggish U.S. economy.
"Once we get past the G20 event, we're going to have that renewed focus on what's going on with the U.S. quantitative easing and another down leg in the U.S. dollar," said David Watt, senior currency strategist at RBC Capital Markets in Toronto.
"There's the possibility of a renewed upswing in the euro," said Watt.
Traders said large bets against the U.S. currency pointed to a correction. But they noted they would not rule out another lurch lower for the dollar, which has fallen about 7 percent against currencies over the past month.
The dollar's early strength faded by the end of the day, slipping 0.06 percent against a basket of major trading-partner currencies <.DXY> but it is up 0.52 percent this week, its first weekly gain since mid-September.
The euro
BAIDU JUMPS, L'OREAL LAGS
On Wall Street, technology shares edged higher as results
from Baidu Inc
The Dow Jones industrial average <.DJI> fell 14.01 points, or 0.13 percent, to end at 11,132.56. But the Standard & Poor's 500 Index <.SPX> rose 2.82 points, or 0.24 percent, to 1,183.08. The Nasdaq Composite Index <.IXIC> gained 19.72 points, or 0.80 percent, to close at 2,479.39.
While the Dow fell on Friday, all three indexes closed higher for a third straight week.
European shares closed down, with the FTSEurofirst 300 <.FTEU3> index of top European shares falling 0.35 percent to end at 1,089.45 points.
Consumer-related stocks, which had surged earlier in the
week, were among the biggest losers. LVMH
"Earnings have been pretty good and a lot of stocks rose this week on the back of this, so people are using the excuse of currency tensions with the G20 meeting to cash in profits," said David Thebault, head of quantitative sales trading, at Global Equities, in Paris.
The MSCI all-country world index of stocks <.MIWD00000PUS> slipped 0.15 percent.
Japan's Nikkei share average rose 0.54 percent to close at 9,426.71 in thin trade <.N225>, while the MSCI Asia Pacific ex-Japan index edged up 0.09 percent<.MIAPJ0000PUS>.
OIL, 30-YEAR BOND AND GOLD ADVANCE
Oil received a lift on news that German business sentiment reached its strongest in 3-1/2 years in October, according to the Munich-based Ifo think tank's business climate index, which indicates growth levels six months ahead. [ID:nLDE69L0K1]
U.S. crude futures
The benchmark 10-year U.S. Treasury note
But the 30-year bond rallied 16/32, pulling the yield down to 3.93 percent. [ID:nN22583439]
Gold prices steadied, paring most losses that took them to 2-1/2 week lows earlier in the session.
Spot gold prices