* Attacks on Saudi oil facilities drive risk-off trade
* Dollar weakens as yen, oil-correlated currencies rise
* Fed, BoJ in focus later in the week
By Tom Westbrook
SINGAPORE, Sept 16 (Reuters) - The dollar fell while safehavens and currencies of oil-producing countries rallied onMonday, following an attack on Saudi Arabian refining facilitiesthat disrupted global oil supply and heightened Middle Easttensions.
Oil prices surged nearly a fifth at one point following thestrikes on two plants, including the world's biggest petroleumprocessing facility in Abqaiq, which knocked out more than 5% ofglobal oil supply.
Yemen's Iran-aligned Houthi group claimed responsibility forthe damage, but the U.S. has pointed the finger directly atIran.
The Canadian dollar rose 0.4% to 1.3233 per dollar.The Norwegian krone rose 0.5% to 8.9363 per dollar. Bothcurrencies often move together with the oil price because thecountries are major oil exporters.
In India, a major importer of crude, the rupee fellalmost 0.7%.
"The natural flow through of higher (oil) prices has seenthe NOK and the CAD outperform, and we'll probable see a betterfeel towards the (Russian) rouble later on," said Chris Weston,head of research at brokerage Pepperstone Group in Melbourne.
The attacks reversed last week's ebullient risk appetite andprompted U.S. President Donald Trump to tweet that the UnitedStates was "locked and loaded" for a response.
"We've got a beady eye on this and we're prepared to pileback in to the Japanese yen after last week's repositioning,"Weston said, adding that while trade was calm, the strikespresented another geopolitical "what if" to vex markets.
The safe-haven Japanese yen and Swiss franc both firmed. Theyen rose 0.3% to 107.79 per dollar and the franc rose0.4% to $0.9883. Gold jumped by 1%.
Against a basket of currencies the dollar edged lowerto 98.162.
Beyond oil, currency markets are awaiting the outcome ofcentral bank meetings in the U.S. and Japan this week andeconomic data in Australia and New Zealand that could determinethe rates outlook in the Antipodes.
"Geopolitical risks and central bank rhetoric remain keydrivers of risk this week," Australia and New Zealand BankingGroup analysts said in a note.
On the Brexit front, British Prime Minister Boris Johnson'sconfidence of sealing a deal to leave the European Union by Oct.31 applied renewed pressure to the pound.
Sterling fell 0.3 from a seven-week high to hit$1.2486.
While much of the risk appetite on display last week wasdriven by signs of a thaw in U.S.-China trade tensions, fewfresh indications of progress left sentiment fragile.
Data released on Monday showed the slowdown in China'seconomy deepened in August, with industrial production growingat its weakest pace in 17-1/2 years and retail sales weaker thananticipated.
That added to pressure for stimulus and in offshore tradethe Chinese yuan weakened 0.25% to 7.0631 per dollar.
In the United States, investors who had begun trimmingexpectations for a U.S. Federal Reserve rate cut on Wednesdayare now certain rates will fall and divided only over how much.
As for the Bank of Japan's policy decision on Thursday, athird of economists polled by Reuters expect stimulus to beramped up. But sources say it may be a close call aspolicymakers wait till the last minute to assess market reactionto the Fed's decision hours earlier.
Japanese markets are closed on Monday for a public holiday.
The euro was steady at $1.1073.(Reporting by Tom Westbrook; Editing by Sam Holmes & KimCoghill)