NEW YORK, Dec 27 (Reuters) - A key gauge of interbank borrowing costs fell for a third straight session on Thursday, marking the longest such streak since August and suggesting less strain in money markets.
The London interbank offered rate (LIBOR) to borrow dollars for three months declined to 2.8030 percent from 2.81344 percent on Monday.
U.K. financial markets, which set this rate, were closed on Tuesday for Christmas and on Wednesday for Boxing Day. The rate fell during the two prior sessions on Monday and Friday.
LIBOR is the benchmark rate for $200 trillion of dollar-denominated financial products, mainly interest rate swaps and floating-rate loans.
LIBOR reached its highest level in more than decade last week, propelled by rate increases from Federal Reserve, rising U.S. government borrowing and a shrinking Fed balance sheet.
LIBOR has fallen on expectations the Fed might slow or even its rate hikes in 2019, analysts said.
Reporting by Richard Leong; Editing by Cynthia Osterman