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FOREX-Dollar sags on dovish Fed, Norwegian crown stumbles

* Dollar index falls to 3-week low as Fed sticks to easy policy

* Norwegian crown sinks after central bank hints at rate cut

* Sterling rises to highest vs dollar since Oct 2008

(Updates market action, changes dateline, previous LONDON) NEW YORK, June 19 (Reuters) - The U.S. dollar fell on Thursday a day after the Federal Reserve signaled it will stick with near-zero interest rate policy to support the world's biggest economy, disappointing traders who had bet on hints of policy tightening. The greenback touched a three-week low against a basket of currencies at 80.147. The euro strengthened to a 10-day high against the dollar, while the sterling advanced to highest level versus the greenback since Oct 2008. "The dollar continues to move lower as long as we are in an environment where the U.S. central bank is passive in tightening policy," said Kathy Lien, managing director of FX strategy at BK Asset Management in New York. A longer-than-expected period of rock-bottom U.S. rates is seen supportive for domestic spending and borrowing but depressive on the dollar's value against other currencies. While U.S. policymakers stuck to their message of ultra loose policy, their Norwegian counterparts did an about-face. The Norges Bank ignited a wave of frantic trading in the Norwegian crown after it overturned expectations of higher interest rates next year, warning that if anything it might have to cut borrowing costs as its economy has struggled in recent quarters. The euro jumped 1.8 percent against the Norwegian currency in high trading volumes, to 8.3262 crowns from around 8.1772 crowns beforehand. That was the crown's weakest since late April and put the single currency on track for its biggest daily rise since mid-September. The dollar rose to a four-month against the crown, last traded up 1.5 percent at 6.1036 crowns.

NEW FORECASTS, SAME MESSAGE U.S. Fed officials released fresh economic projections on Wednesday following their two-day policy meeting. Officials expected policy rates to rise a tad more in 2015 and 2016 than they had previously forecast, but lowered their long-term rate target. The forecasts, together with the Fed's policy statement and Fed Chair Janet Yellen's news conference, stopped well short of the hawkish drift some traders had expected. "There were those speculating that the Fed would have to come up with a more hawkish commentary and obviously they have been disappointed," said Neil Mellor, a strategist with Bank of New York Mellon in London. That hurt the dollar and sent benchmark Treasuries yields to a two-week low at 2.565 percent. The dollar dipped 0.1 percent against the yen at 101.80 yen , holding within its trading range since last week. The euro gained almost 0.3 percent versus the greenback at $1.3630, the highest since last Monday. The sterling climbed to its strongest level against the U.S. currency since Oct. 2008, and last traded at $1.7045.

(Additional reporting by Anirban Nag; and Patrick Graham in London; Editing by Catherine Evans and Meredith Mazzilli)