* Dollar index holds near three-year peak
* Euro near 3-month low vs USD, sterling close to 3-year low
* Disappointing Chinese trade data weighs on Aussie dollar
* Fed minutes and Bernanke speech due later on Wednesday
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, July 10 The dollar hovered near a three-year high against a basket of currencies on Wednesday, while the Australian dollar briefly sagged after weak Chinese trade data reinforced expectations that China's economy is slowing.
The euro and sterling struggled to regain ground after tumbling the previous day, dented by growing expectations that central banks in the euro zone and Britain will have to keep policy loose for a long time.
Such views have given an added boost to the greenback, which has rallied over the past several weeks as upbeat data, including a strong nonfarm payrolls report last week, cemented the view that the Federal Reserve could start scaling back stimulus as early as September.
Later on Wednesday investors will scrutinise the minutes of the Fed's June monetary policy meeting and a speech by Fed Chairman Ben Bernanke, watching for fresh hints on when the Fed will start reducing its asset purchases, and whether there will be any catalysts for further dollar buying.
"In a word, it's a bit scary," said a trader for a Japanese bank in Singapore. "I think everyone is pretty sensitive right now," the trader said.
The dollar index, which measures the dollar's value against a basket of major currencies, stood at 84.640, hovering near a three-year high of 84.753 set on Tuesday.
The euro held steady near $1.2777. It had hit a three-month low of $1.2755 on Tuesday, after European Central Bank policymaker Joerg Asmussen said the central bank's guidance on interest rates staying at a record low extended beyond 12 months.
The ECB later issued a statement saying Asmussen had not intended to give any guidance on the exact length of time for which it expects to keep rates at record lows.
"Although the ECB subsequently clarified and backtracked on this statement, euro zone policymakers clearly remain in a dovish mode and keen to keep rate expectations skewed to the downside," analysts at BNP Paribas wrote in a client note.
Standard & Poor's downgrade of Italy to BBB from BBB-plus on Tuesday gave investors a further reason to sell the common currency.
Sterling wallowed near a three-year low after surprisingly weak UK manufacturing data kept alive expectations of more aggressive monetary easing by the Bank of England.
Sterling held steady at $1.4867, having set a low of $1.4814 on Tuesday, the pound's lowest level since June 2010.
Earlier, the Aussie dollar hit a session low of $0.9125 after the much weaker-than-expected Chinese trade data underscored concerns about an economic slowdown in China, a major destination for Australian exports.
But it recouped those losses to stand little changed at $0.9176.
The U.S. dollar eased 0.2 percent to 100.98 yen, staying below a high of 101.54 yen set earlier this week, the greenback's strongest level versus the yen since late May.