(Updates prices, adds comments; changes byline, dateline;
* Dollar index set to gain 3.5 pct for year
* Euro briefly surges about two full cents vs dollar
* Dollar to gain more than 16 pct vs sterling in 2016
* Dollar on track for first yearly loss in five vs yen
By Sam Forgione
NEW YORK, Dec 30 The U.S. dollar was on track to
notch a fourth straight year of gains against a basket of major
currencies on Friday, despite briefly tumbling against the euro
during the Asian trading session on thin liquidity.
The dollar index, which measures the greenback against
a basket of six major rivals, was on track to gain 3.5 percent
for the year, even as the euro briefly climbed nearly two full
cents in overnight trading to $1.0651, its highest since Dec.
The index has gained 4.3 percent since the Nov. 8 U.S.
presidential election on expectations that U.S. President-elect
Donald Trump's plan to boost fiscal stimulus would benefit the
currency. The Federal Reserve's projections on Dec. 14 of three
rate hikes for 2017 instead of the two foreseen in September
have also contributed.
Several analysts have said the dollar's uptrend remains
intact next year, but they have not ruled out the risk of
declines in the greenback, given their doubts surrounding how
much dollar appreciation a Trump White House will tolerate.
"Much depends on how the Trump presidency and the Chinese
economy work out," said Marshall Gittler, chief market analyst
for retail broker FX Primus. "In general, I expect the dollar to
continue to gain."
The dollar index was last off 0.62 percent at 102.040, down
from a 14-year high of 103.65 hit on Dec. 20. The dollar was up
0.21 percent against the yen at 116.77 yen, but was set
to post its first yearly loss in five years against the Japanese
currency, of about 3 percent.
Sterling, which has lost more than 16 percent of its value
against the dollar to mark its worst year since 2008 on worries
over Britain's June 24 "Brexit" vote to leave the European
Union, was last up 0.82 percent at $1.2368.
The euro was up 0.67 percent against the dollar at $1.0561,
though down nearly a full cent from its session high.
"The move is completely generated out of a New Year's Eve
lack of liquidity," said Jason Leinwand, founder and chief
executive of FirstLine FX in Randolph, New Jersey.
Other big losers this year against the dollar have been the
Mexican peso and the Chinese yuan, which have lost
20.2 percent and 6.9 percent, respectively.
(Reporting by Sam Forgione; Additional reporting by Patrick
Graham in London)