December 27, 2017 / 8:01 PM / 6 months ago

FOREX-Dollar index hits 3-1/2 week low, bitcoin bounce fades

    * Euro hits 3-1/2 week high vs dollar
    * Bitcoin struggles to rise further after last week's selloff
    * Commodities rally supports Canadian, Australian dollars

 (Updates market action, adds quote)
    By Richard Leong
    NEW YORK, Dec 27 (Reuters) - The U.S. dollar fell to a 3-1/2 week low
against a basket of currencies on Wednesday as traders bet more major central
banks will begin reducing monetary stimulus in 2018 because of faster global
economic growth.
    In the cryptocurrency arena, Bitcoin's rebound following its worst week
since 2013 fizzled as it struggled to stay above $16,000 for a second day.
    "The dollar has taken quite a beating against the majors in 2017," said Minh
Trang, senior foreign currency trader at Silicon Valley Bank in Santa Clara,
California.
    In holiday-thinned trading, an index that tracks the greenback against six
currencies was down more than 0.2 percent at 93.027 after slipping to
92.956, its lowest since Dec. 1 earlier.
    The dollar index has fallen 9.0 percent this year, putting it on track for
its steepest annual decline since 2003, when it dropped 14.7 percent. 
    Conversely, the euro would have its best year against the greenback since
2003. The single currency reached a 3-1/2 week high of $1.1904 on
Wednesday, Reuters data showed.
    The dollar weakened against the yen for a second straight year. It held
steady on the day at 113.26 yen. 
    Traders have shifted their focus from last week's passage of the biggest
U.S. tax overhaul in 30 years to central banks other than the U.S. Federal
Reserve and whether they will reduce bond purchases or start raising interest
rates next year, said Peter Chia, FX strategist for United Overseas Bank in
Singapore.
    Bitcoin, down 4.31 percent at $15,055.13 on the Luxembourg-based
Bitstamp exchange, struggled to rebound further after last week's rout. The
biggest and best-known digital currency briefly traded below $15,000. 
    "Some people were nervous about it getting above $16,000 and began dumping
it," said Greg Adamsick, director of global futures and options at RCM
Alternatives in Chicago.
    Meanwhile, oil prices surged to 2-1/2 year highs on Tuesday on news
of an explosion on a Libyan crude pipeline and voluntary OPEC-led supply cuts.
Copper prices on Wednesday rocketed to a four-year peak.

    Those developments bolstered demand for the currencies of commodity
exporting countries, with the Canadian dollar touching C$1.2627, its
strongest level in three weeks.
    The Australian dollar rose 0.6 percent to $0.7773, its highest
level in two months.
========================================================
    Currency bid prices at 2:43 PM ET (1943 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1896        $1.1858     +0.32%         +13.16%     +1.1910     +1.1856
 Dollar/Yen       JPY=        113.2600       113.2200    +0.04%         -3.09%      +113.3700   +113.1500
 Euro/Yen         EURJPY=     134.74         134.27      +0.35%         +9.42%      +134.9700   +134.2100
 Dollar/Swiss     CHF=        0.9867         0.9889      -0.22%         -3.06%      +0.9904     +0.9861
 Sterling/Dollar  GBP=        1.3393         1.3372      +0.16%         +8.57%      +1.3429     +1.3369
 Dollar/Canadian  CAD=        1.2643         1.2688      -0.35%         -5.86%      +1.2695     +1.2627
 Australian/Doll  AUD=        0.7773         0.7727      +0.60%         +7.73%      +0.7778     +0.7724
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1739         1.1731      +0.07%         +9.54%      +1.1776     +1.1731
 Euro/Sterling    EURGBP=     0.8881         0.8863      +0.20%         +4.26%      +0.8888     +0.8855
 NZ/Dollar        NZD=        0.7066         0.7037      +0.41%         +1.80%      +0.7076     +0.7030
 Dollar/Norway    NOK=        8.2663         8.3089      -0.51%         -4.29%      +8.3243     +8.2674
 Euro/Norway      EURNOK=     9.8358         9.8548      -0.19%         +8.25%      +9.8859     +9.8376
 Dollar/Sweden    SEK=        8.2681         8.3469      -0.62%         -9.22%      +8.3545     +8.2681
 Euro/Sweden      EURSEK=     9.8360         9.8972      -0.62%         +2.67%      +9.9205     +9.8367
 
    
    

    
 (Additional reporting by Tommy Wilkes in London; Masayuki Kitano in Singapore;
Editing by Andrew Roche and Andrew Hay)
  
 
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