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FOREX-Dollar cools from 14-year peak, Swedish crown jumps
December 21, 2016 / 5:40 PM / in a year

FOREX-Dollar cools from 14-year peak, Swedish crown jumps

* Euro rebounds against dollar from lowest since 2003
    * Swedish crown jumps on Riksbank narrowly voting to keep QE

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Dec 21 (Reuters) - The dollar retreated from a
14-year high on Wednesday, while the Swedish crown booked its
biggest gains in six months after Sweden's central bank voted by
a thin margin to extend its bond purchase program.
    Some traders likely reduced their dollar holdings on
profit-taking ahead of a big batch of U.S. economic data on
Thursday and the Christmas holiday, analysts said.
    "There are no big fundamental underpinnings to the move.
It's more a technical adjustments ahead of the holidays," said
Paresh Upadhyaya, director of currency strategy at Pioneer
Investments in Boston.
    The greenback has chalked up all its 4.5 percent gains for
the year since the Nov. 8 U.S. election, as traders have bet
that President-elect Donald Trump and a Republican-controlled
Congress will embark on steep tax cuts and fiscal spending to
stimulate the economy.
    The dollar index which measures the greenback against
euro, yen and four other currencies was 0.26 percent lower at
102.02. It reached 103.65 on Tuesday, which was its highest
since December 2002.
    Its decline was limited on the Federal Reserve's signal last
week it might increase interest rates at a swifter pace than
previously thought.
    The euro was up 0.4 percent at $1.0423, rebounding
from $1.0352 on Tuesday, the lowest since January 2003.
    Traders are casting a wary eye on Italy's troubled bank
Monte dei Paschi di Siena, which needs to raise 5
billion euros by the end of the year to avoid being wound up by
the European Central Bank.  
    The greenback dipped 0.1 percent to 117.73 yen.    
    Analysts cautioned the dollar is vulnerable if details on
Trump's policies fall short of market expectations.

    SWEDISH CROWN JUMPS
    The Swedish crown was the day's biggest mover, posting its
biggest one-day gains versus the euro and dollar since June.
    Sweden's central bank, the Riksbank, kept interest rates on
hold at -0.50 percent and extended its quantitative easing (QE)
or bond purchase program after a split board forced Governor
Stefan Ingves to use his casting vote for the first time since
2008.    
    Dissenters on the board held the view, shared by many
analysts, that the ultra-loose monetary policy is out of sync
with an economy expected to grow more than 3 percent this year
and 2 percent in 2017.
    With the Riksbank's stimulus, Swedish housing debt and
private sector borrowing appeared stretched.
    "This one is probably the last QE extension, in our view,"
said Daniele Antonucci, economist at Morgan Stanley in London.
"Stimulus, monetary and fiscal, is unlikely to be extended much
further."
    The euro was down 0.9 percent against the crown at 9.6190
crowns. 
    The dollar was 1.3 percent weaker on the day at 9.2270
crowns. 
========================================================
    Currency bid prices at 11:53AM (1653 GMT)
 Description      Last           U.S. Close  Pct Change
                                  Previous   
                                  Session    
 Euro/Dollar      $1.0429        $1.0385     +0.42%
 Dollar/Yen       117.7500       117.8400    -0.08%
 Euro/Yen         122.80         122.38      +0.34%
 Dollar/Swiss     1.0252         1.0294      -0.30%
 Sterling/Dollar  1.2352         1.2365      -0.11%
 Dollar/Canadian  1.3395         1.3367      +0.21%
 Australian/Doll  0.7247         0.7259      -0.17%
 ar                                          
 Euro/Swiss       1.0692         1.0683      +0.08%
 Euro/Sterling    0.8441         0.8406      +0.42%
 NZ               0.6904         0.6914      -0.14%
 Dollar/Dollar                               
 Dollar/Norway    8.6662         8.7035      -0.43%
 Euro/Norway      9.0386         9.0415      -0.03%
 Dollar/Sweden    9.2249         9.3480      -0.92%
 Euro/Sweden      9.6202         9.7099      -0.92%
 
    
 (Additinal reporting by Jamie McGeever in London; Editing by
Robin Pomeroy and W Simon)

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