* Dollar rallies against safe-haven yen
* Commodity currencies benefit from OPEC output cut deal
* Questions remain on how to cut production
By Jemima Kelly
LONDON, Sept 29 (Reuters) - The dollar hit an eight-day high against the safe-haven yen on Thursday after an OPEC deal to cut oil output spurred a move into riskier assets, though questions over the efficacy of the agreement left the greenback off its earlier highs.
The Organization of the Petroleum Exporting Countries said it would reduce output to a range of 32.5 million-33.0 million barrels per day, a reduction of 0.7-2.2 percent, and the first such deal since 2008.
The currencies of oil-exporting countries such as Canada and Norway surged after the deal late on Wednesday, but were slightly down on Thursday, mirroring a dip in oil prices, as markets grew more sceptical on how OPEC would implement the planned output cut.
Both currencies were still, however, trading more than 1 percent higher than their levels before the oil deal was announced by 1150 GMT. The Norwegian crown had been a clear winner, hitting a 14-month high of 9.00 per euro, but fell about 0.3 percent on Thursday.
“Clearly it’s not insignificant that it’s the first OPEC agreement of any sort for eight years, but I think there still are many question marks over how deliverable the output reduction will be,” said RBC Capital Markets currency strategist Adam Cole.
“The market has taken the rally in crude prices as a risk-on driver...and I‘m not sure how durable that is when the recovery in crude prices is being driven by supply rather than demand.”
Some analysts cautioned that the oil-cut deal is leaving crucial details on how much each country will produce to be decided at the next formal OPEC meeting in November, when an invitation to join cuts could also be extended to non-OPEC countries such as Russia.
The dollar had jumped as much as 1.1 percent to 101.75 yen , its strongest since Sept. 21, but fell back to around 101.49 yen, still up 0.8 percent on the day.
Against a basket of currencies, the greenback was slightly up on the day at 95.46.
“The environment for the dollar is still broadly supportive - the Fed is still the only central bank that looks set to raise interest rates,” said BMO Capital Markets currency strategist Stephen Gallo, in London.
“At a time like this you tiptoe back into yield, you tiptoe back into carry,” he added, referring to the practice of borrowing a low-yielding, low-risk currency and selling it to buy a riskier one with a higher return.
The Australian dollar also hit a three-week high of $0.7711 - the country exports various natural resources even though it is a net importer of oil - but was down 0.3 percent by 1150 GMT.
For Reuters new Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets (Additional reporting by Hideyuki Sano in Tokyo; Editing by Angus MacSwan)