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* ECB policy comments put pressure on euro
* Strong start to earnings season, though outlook weak
* Dollar strengths sends oil slightly lower
* Graphic: sterling year-to-date
By Alistair Smout
LONDON, Oct 21 (Reuters) - Global stocks were set for their first weekly gain in four weeks on Friday and the dollar rose to its highest since March, as the euro came under pressure after the European Central Bank shot down talk of a tapering of its asset purchases.
The euro hit a seven-month low against the dollar after the ECB left its ultra-loose policy unchanged on Thursday but kept the door open to more stimulus in December.
ECB President Mario Draghi said the bank had not discussed winding down the 1.7 trillion euro asset-buying programme at its policy meeting.
"Weaning markets off easy monetary policy will be a delicate exercise for the ECB, and we think the bank is unlikely to remove its stimulus until inflation is solidly on track to 2 percent," Andrew Bosomworth, managing director and portfolio manager at PIMCO, said in a note.
"We thus view tapering as a topic for 2017 and beyond."
The euro was down 0.4 percent at $1.0890
The dollar's index
China's offshore yuan
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The dovish ECB stance helped underpin appetite for European stocks. Equities have been more broadly boosted by a good start to the earnings season, with expectation-beating results from U.S. banks the highlight so far.
But the week was set to end on a soft note. The STOXX Europe 600
Microsoft was set to open at an all-time high after results, providing support to the Nasdaq, though elsewhere the picture was more mixed.
Some companies, including Daimler, have posted solid results but weak outlooks, and analysts queried whether the market's recent run was sustainable.
"This week held several positives for markets. The Q3 earnings season so far managed to surprise rather strong market expectations and solidified anticipations that the earnings recession has ended after four quarters," said Susan Joho, economist at Julius Baer.
"As good as these developments may look at first sight, none of them are robust enough to be sustained in the next months. The reality looks more sober: corporate guidance is weak."
European equities posted a record 37th straight week of outflows, according to Bank of America/Merrill Lynch, and Europe Inc's third-quarter earnings are expected to see a double-digit decline, Thomson Reuters I/B/E/S/ data shows.
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Sterling slipped 0.3 percent to $1.2211
Weakness in the euro saw it slip to its lowest level versus the pound since a "flash crash" in sterling on October 7.
Portugal's government bond yields held just above six-week lows, with analysts expecting Lisbon to survive a crucial ratings review and keep its place in the European Central Bank's asset purchase scheme.
Oil edged higher as Russia reiterated its commitment to joining a producers' output freeze to stem a two-year slide in prices, turning higher after a strong dollar had knocked back prices overnight. Brent crude
Weakness in oil prices overnight contributed to falls in Asian equities.
MSCI's broadest index of Asia-Pacific shares outside Japan
(Reporting by Alistair Smout; Editing by Toby Chopra and John Stonestreet) ((alistair.smout@thomsonreuters.com; +44 207 542 7064; Reuters Messaging: alistair.smout.thomsonreuters.com@reuters.net))
Keywords: GLOBAL MARKETS/