* China studying potential gradual yuan depreciation - media
* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
LONDON, April 9 (Reuters) - The dollar rose against its rivals on Monday, extending a two-week run, as investors unwound some short dollar bets on worries an escalating trade conflict between the United States and China may trigger buying of dollar assets.
Most of its gains were chalked up against the Asian currencies with the Chinese yuan holding near the day's lows against the greenback after a media report that China was evaluating the potential impact of a gradual yuan depreciation as a tool in the escalating trade dispute.
"These sort of headlines are more of a tool to elevate tensions and is being used as a negotiating strategy and markets are waiting for concrete measures," Altana Hard Currency Fund portfolio manager Ian Gunner said.
The dollar rose 0.2 percent against a basket of currencies extending earlier gains. Over a two-week period it is up nearly 1.5 percent. It rose about 0.2 percent against the Japanese yen.
Trade war concerns have prompted investors to trim their record bearish bets against the greenback, with latest positioning data showing that net short bets against the dollar have fallen for the second week.
UBS strategists say a trade war would hurt Asian exports and prompt outflows from export-oriented equity markets such as Singapore, Malaysia and Taiwan.
Chinese state researchers and media have talked down the likely impact of U.S. trade measures on the world's second largest economy and described the Trump administration's posturing on trade as the product of an "anxiety disorder".
The dollar index set a one-month high of 90.597 ahead of the U.S. nonfarm payrolls report data on Friday but later lost some steam, weighed down by concerns about the U.S.-China trade dispute and disappointing U.S. jobs data.
"We're no longer in a phase where the dollar keeps falling persistently against the yen," Barclays senior strategist Shinichiro Kadota said.
Meanwhile, the euro was broadly stable despite two latest survey points that added to the latest bunch of lacklustre headlines from the euro zone.
German exports plunged unexpectedly in February, posting their biggest monthly drop for more than two years while a survey showed that investor morale in the euro zone deteriorated for the third month in April.
"The trade data series can be a bit volatile but there is no denying the fact that the euro has lost a bit of momentum in recent days," Altan's Gunner said.
The single currency was broadly flat at $1.2268 and has been trapped in a broad $1.215 to $1.255 range for the last two months.
Overall long euro positions have been broadly unchanged and are holding near record highs though this week might see a change in positions with the ECB minutes of its last policy meeting due on Thursday.
Elsewhere, sterling was holding its own and edged higher against a broadly strong dollar as strong housing data from mortgage lender Halifax virtually sealed the case for a rate hike next month.
(Reporting by Saikat Chatterjee; Additional reporting by Masayuki Kitano in SINGAPORE)