* Stocks & Australian dollar turn higher after China data
* European shares expected to open slightly higher
* Copper, oil edge up, then relinquish gains
By Ian Chua
SYDNEY, July 15 (Reuters) - Asian stocks rose on Monday, while the Australian dollar popped higher as investors heaved a sigh of relief after a batch of Chinese data showed the slowdown in the region's economic powerhouse was not as bad as feared.
European shares were expected to track gains in Asia bourses, while U.S. stock index futures were up 0.2 percent.
"European equities are set to start the week with a slight bid at the open on the Chinese data," said Jonathan Sudaria, a dealer at Capital Spreads in London.
China's second-quarter economic growth cooled to 7.5 percent versus a year earlier, from 7.7 percent in January-March, in line with expectations. Other figures showed a healthy rise in retail sales, while industrial output slightly undershot forecasts.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.2 percent, erasing most of Friday's decline.
Mainland Chinese stocks climbed more than 1 percent, while gains were much smaller elsewhere in Asia. Japanese financial markets were closed for a public holiday.
"The key is that while the rest of the world would like China to grow at 10 percent, policymakers are happy for growth to maintain between 7-7.5 percent over the coming year," said Savanth Sebastian, economist at CommSec in Sydney.
"The good news is that the latest readings don't suggest that a hard landing is on the cards. And indeed if more stimulus is required, the central bank is well placed to wade in with additional liquidity, with inflation well contained," he said.
Despite Monday's rebound, Asian stocks underperformed their U.S. peers, which hit record closing highs for a second session on Friday .
Underpinning Wall Street was Federal Reserve Chairman Ben Bernanke's latest pledge to keep monetary policy loose for some time, dovish comments that made markets rein in hawkish expectations.
That has weighed significantly on the U.S. dollar, which fell 1.7 percent against a basket of major currencies last week in its second-biggest weekly fall this year.
The dollar index has since found some stability, hovering just above a two-week trough plumbed last week.
Weakness in the greenback has helped the euro jump as high as $1.3208 last week, from lows around $1.2755. The common currency last stood at $1.3072.
The standout in currency markets was the Australian dollar, which climbed about a quarter of a U.S. cent following the Chinese data, reaching a session high at $0.9119.
It had fallen below 90 U.S. cents on Friday for the first time in three years amid talk that growth in China has slowed even more than forecast. China is Australia's single biggest export market.
Commodity markets saw small gains after the Chinese data, but these then slipped away. Copper rose initially, then fell 0.3 percent to $6,935 a tonne. U.S. crude also edged up, but later was flat near $106 a barrel.
Gold traded at $1,290 an ounce, maintaining its momentum after last week's near 5 percent rally - its biggest weekly advance in nearly two years.