* Yuan hits one-week high on Biden-Xi phone call * Dollar index edges lower but set for first week of gains in 3 * Aussie, Kiwi benefit, Japanese yen sold LONDON, Sept 10 (Reuters) - The dollar edged lower on Friday as pro-growth currencies gained following a rise in the Chinese yuan to a one-week high on news that U.S. President Joe Biden and Chinese leader Xi Jinping spoke for the first time in seven months. In a statement, the White House said Biden and Xi had “a broad, strategic discussion”, including areas where interests and values converge and diverge. The conversation focused on economic issues, climate change and COVID-19, a senior U.S. official told reporters. The yuan gained 0.2% on the dollar after the news, moving away from the key 6.50 yuan per dollar level to 6.4387 - its highest since Sept. 3. “We have seen USD/CNH go offered on the news and any surprise improvement/reset in U.S.-China relations could see USD/CNY move further away from the key 6.50 threshold,” said ING strategists in a morning note to clients. “Such a move is typically positive for pro-cyclical FX and slightly negative for the dollar - hence our down arrow in the dollar today.” The Australian dollar gained 0.35% to $0.7392, heading for a 0.7% slide this week. Also boosted by the yuan move was the New Zealand dollar, which gained nearly half a percent to $0.7141. Both currencies tend to benefit when risk sentiment is positive. The Japanese yen lost 0.2% against the dollar to 109.97 yen while still meandering in the middle of its range of the past two months. Relations between the United States and China have been testy since Xi and Biden’s first call in February. The two sides have lashed out at each other almost constantly, often with vitriolic public attacks, sanctions on officials and accusations of not upholding international obligations. The dollar index, which measures the greenback against six major peers, was down 0.1% on the day at 92.421, although still on course for a 0.35% weekly rise. The greenback has rebounded from a payrolls-induced sell-off last week, as a number of Federal Reserve officials have come out to suggest a taper is still likely this year. Fed Governor Michelle Bowman said on Thursday that the weak August labour report would not throw the U.S. central bank off course. Last Friday, the dollar index sank to the lowest since Aug. 3 after data showed the U.S. economy created the fewest jobs for seven months, reducing the odds of an imminent reduction of the Fed’s asset-purchase programme. Data on Thursday showed that the number of Americans filing new claims for jobless benefits fell last week to the lowest level in nearly 18 months, offering more evidence that job growth was being hindered by labour shortages rather than cooling demand for workers. “The Fed looks set to taper later this year, underscored by recent comments this week,” Mark McCormick, global head of FX strategy at TD Securities, wrote in a research note. However, even with the trend toward monetary policy becoming less accommodative globally, financial conditions remain ultra-loose, which “binds how much room the USD has to run and favours selling rallies”, McCormick said. The euro was 0.1% higher at $1.1838 on Friday, on track for a 0.35% decline this week. The single currency got some small measure of support overnight, after the European Central Bank said it would trim emergency bond purchases over the coming quarter, as widely expected. Reporting by Ritvik Carvalho; additional reporting by Kevin Buckland in Tokyo; Editing by Catherine Evans Our Standards: The Thomson Reuters Trust Principles.