×

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) 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)

))