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CORRECTED-FOREX-Dollar index holds near 14-year high
December 21, 2016 / 7:39 PM / in 10 months

CORRECTED-FOREX-Dollar index holds near 14-year high

(In Dec 19 item, corrects spelling of last name to Leinwand,
not Weinwand, in 5th paragraph)
    * Dollar slips from 10-month high vs yen after Japanese
trade data
    * Greenback rally pauses on falling U.S. bond yields
    * Investors seen lightening positions into year-end

    By Richard Leong
    NEW YORK, Dec 19 (Reuters) - The dollar was little changed
on Monday versus a basket of currencies, holding near a 14-year
peak buttressed by expectations of fiscal stimulus from U.S.
President-elect Donald Trump and a faster pace of interest rate
increases.
    The greenback scaled back from its highest since early
February against the yen as data that showed Japan's export
performance improved strongly in November spurred a burst of
profit-taking. 
    The dollar, which has rallied since Trump's win on Nov. 8,
will likely trade in a tight range in coming days on dwindling
liquidity, analysts said.
    Profit-taking and lower U.S. Treasury yields 
 would keep the greenback from rising further, they
said. 
    "The dollar would be reasonably sideways between now and the
end of the year," said Jason Leinwand, founder and chief
executive officer of FirstLine FX in Randolph, New Jersey.
    The dollar index which measures the greenback versus
the euro, yen and four other currencies, was up 0.03 percent at
102.98. On Dec. 15, it reached 103.56 which was its highest
since Dec 2002.
    Traders await a speech from Fed Chair Janet Yellen at 1:30
p.m. (1830 GMT) for possible hints that last week's Fed meeting,
where policy-makers signaled the central bank could increase
interest rates three times in 2017, was interpreted by markets
as more hawkish than had been intended. 
    U.S. interest rates futures implied traders saw about a 46
percent chance the Fed would hike at least three times in 2017
with the next increase likely in June, according to CME Group's
FedWatch program.  
    Prospects of more rate hikes supported bullish bets on the
dollar. Data released on Friday showed dollar net long positions
were little changed on Dec. 13. Net shorts on the yen rose to
their largest since early December last year.  
    The Bank of Japan started a two-day policy meeting on
Monday, at which it is expected to keep its 10-year government
bond yield target as the weaker yen helps Japan's
economic prospects, a Reuters poll showed on Friday.
 
    "The speed of the yen's weakening was likely much faster
than the BOJ anticipated," said Ayako Sera, market economist at
Sumitomo Mitsui Trust Bank in Tokyo.
    The dollar was down almost 0.9 percent at 117.13 yen 
after climbing to 118.66 yen on Dec. 15 which was the highest
since Feb. 2, according to Reuters data showed.  
========================================================
    Currency bid prices at 1005 a.m. EST (1505 GMT):
 Description      Last           U.S. Close  Pct Change
                                  Previous   
                                  Session    
 Euro/Dollar      $1.0431        $1.0447     -0.15%
 Dollar/Yen       117.0700       117.9800    -0.77%
 Euro/Yen         122.12         123.32      -0.97%
 Dollar/Swiss     1.0255         1.0254      +0.01%
 Sterling/Dollar  1.2381         1.2487      -0.85%
 Dollar/Canadian  1.3390         1.3331      +0.44%
 Australian/Doll  0.7254         0.7304      -0.68%
 ar                                          
 Euro/Swiss       1.0697         1.0723      -0.24%
 Euro/Sterling    0.8423         0.8371      +0.62%
 NZ               0.6944         0.6957      -0.19%
 Dollar/Dollar                               
 Dollar/Norway    8.6599         8.6635      -0.04%
 Euro/Norway      9.0340         9.0622      -0.31%
 Dollar/Sweden    9.3703         9.3563      +0.05%
 Euro/Sweden      9.7746         9.7695      +0.05%
    

    
 (Additional reporting by Jemima Kelly in London and Tokyo
markets team; Editing by Chizu Nomiyama)

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