(Adds oil, gold settlement prices)
* U.S. stocks eke new records, European stocks mixed
* U.S. President Trump faces impeachment vote
* German business sentiment rises in December
By Herbert Lash
NEW YORK, Dec 18 (Reuters) - The dollar gained on Wednesday as improving economic data squashed the likelihood of a Federal Reserve interest rate cut in 2020, while global equity markets extended a rally that again pushed key indices on Wall Street to record highs.
Gold eased, tugged lower by a firmer dollar that has found support from mounting expectations the Fed will not cut rates anytime soon.
MSCI's gauge of stocks across the globe gained 0.03%, trading modestly higher after declining overnight in Asia. Emerging market stocks rose 0.55%, with Brazil's Bovespa index hitting a record high.
European shares traded mixed as gains in Swedish truck maker Volvo and defensive sectors offset worries about a hard Brexit, which continued to pressure British mid-cap shares.
Most regional bourses hovered around lows touched on Tuesday, when UK Prime Minister Boris Johnson set a hard deadline of December 2020 to reach a new trade deal over Britain's exit from the European Union.
The pan-European STOXX 600 index lost 0.13%.
There are jitters regarding the "phase one" U.S.-China trade deal as it has yet to be signed, said Sebastien Galy, senior macro strategist at Nordea Asset Management in Luxembourg.
"We are in a wait-and-see mode, momentum has been strong and should continue into year end," Galy said.
The S&P 500 and Nasdaq clawed to new record highs. Hopes for a U.S.-China trade deal have propelled the two indices to record closing levels for four straight sessions.
Expectations the Fed will cut rates from the current 1.5% to 1.75% range are a mere 2.2% for the January meeting, 4.3% for March and 12% for April, according to CME Group's FedWatch tool.
The FedWatch tool shows a 50% chance that rates will remain at current levels through December 2020.
The dollar index rose 0.18%, with the euro down 0.3% to $1.1115. The Japanese yen weakened 0.11% versus the greenback at 109.61 per dollar.
U.S. Treasury yields were steady as investors shrugged off the likely impeachment in the lower house of Congress of U.S. President Donald Trump on charges of abusing his office and obstructing a congressional probe.
Separate votes on the two charges are expected in the early evening. The votes are expected to fall almost entirely along party lines, with Democrats in favor and Republicans opposed.
The benchmark 10-year U.S. Treasury note fell 10/32 in price to yield 1.9239%.
Yields on European government debt edged higher as the market bets negative rates are not here forever with Sweden's central bank set to move away from negative rates on Thursday, Galy said.
German business morale rose more than expected in December to a six-month high, the Ifo survey showed on Wednesday, suggesting that Europe's largest economy picked up steam in the fourth quarter.
The yield on the German 10-year bund rose almost 4 basis points to -0.251%.
Oil prices steadied after U.S. government data showed a decline in crude inventories and on expectations for an uptick in demand next year on the back of progress in resolving the U.S.-China trade fight.
Brent futures gained 7 cents to settle at $66.17 a barrel, while U.S. West Texas Intermediate (WTI) settled down 1 cent at $60.93 a barrel.
U.S. gold futures inched down 0.1% to settle at $1,478.70 an ounce.
Reporting by Dhara Ranasinghe; additional reporting by Wayne Cole in Sydney; editing by Larry King and Nick Zieminski