* Dollar near 14-yr high vs euro, basket of major currencies
* Dollar/yen near 10 1/2-month peak after BOJ
* Markets pin down hopes on Trump's fiscal policy for now
By Hideyuki Sano
TOKYO, Dec 21 The dollar held the upper hand
against its major rivals on Wednesday, sitting near a 14-year
top against the euro, thanks to bets of higher U.S. growth and a
faster pace of interest rate increases under incoming president
In thinning trading ahead of the year-end holiday period,
the euro slipped below last week's 14-year low of
$1.03665 on Tuesday to reach $1.0352, a level last seen in
That helped to push the dollar's trade-weighted index
against a basket of six major currencies to touch
103.65, also a 14-year high.
"The dollar looks pretty strong. Although there are no fresh
trading factors as we head into the Christmas, we see dollar
buying whenever the currency slips," said Shinichiro Kadota,
chief forex strategist at Barclays.
"We haven't seen anything that could change its Trump-driven
rally," he added.
The dollar index has risen 5.8 percent since the upset
election victory by Trump, who has pledged big tax cuts and
spending increases and threatened to slap tariffs on imports
from China and Mexico as well as taking a tougher stance on
Investors rushed to U.S. assets as they bet his expansionary
fiscal policy will boost U.S. growth, inflation and interest
rates. The yield allure of dollar-based assets, underpinned by
surging U.S. bond yields, remains a main draw for the greenback.
With central banks in Europe and Japan committing to very
loose monetary policies, investors continue to pile into the
The Federal Reserve, which hiked rates last week, signaled
three more increases next year from the previous projection of
Against the yen the dollar edged up to 117.83 yen,
coming within reach of its 10 1/2-month high of 118.66 touched
on Dec 15.
Selling in the yen gathered pace after the Bank of Japan
maintained its policy settings on Tuesday and after Governor
Haruhiko Kuroda doused talk the BOJ might consider raising the
target in the 10-year bond yield next year.
The British pound fell to one-month low of $1.2313
on Monday, pressured by renewed uncertainty over the process by
which Britain will leave the European Union.
Looking ahead, traders are casting an eye on Italy's
troubled bank Monte dei Paschi di Siena, which needs
to raise 5 billion euros ($5.2 billion) by the end of the year
to avoid being wound down by the European Central Bank.
(Editing by Shri Navaratnam)