December 1, 2016 / 7:00 PM / a year ago

FOREX-Dollar falls after solid November, sterling rises

* Dollar index slips after solid 3.1 pct gain in November
    * Sterling briefly posts 1.6 pct rise vs dollar after Brexit
    * ECB seen extending bond purchases beyond March 2017 -

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Dec 1 (Reuters) - The dollar on Thursday lost
ground against a basket of currencies as traders booked gains
following a solid November and on caution ahead of Friday's
government payrolls report.
    The greenback weakened against sterling on a perceived crack
in Britain's "hard Brexit" line on leaving the European Union
after Brexit minister David Davis said Britain would consider
paying into the EU budget for market access. The pound at one
point was up about 2 cents or 1.6 percent to a three-week high
against the dollar at $1.2696. 
    "The U.S. dollar is trading heavily against most of the
major currencies, but the general tone appears consolidative in
nature," said Marc Chandler, global head of currency strategy at
Brown Brothers Harriman in a research note.
    The dollar's index against a basket of six major currencies
 fell 0.3 percent to 101.22. It reached a 13-1/2-year peak
of 102.05 last week and gained about 3 percent for a second
month in November.
    The greenback pulled back from an earlier 9-month peak
against the yen and was flat on the day at 114.41 yen. 
    The dollar's wobbly start in December was stemmed by higher
U.S. Treasury yields following upbeat data on manufacturing and
construction spending.
    Investors are waiting to see whether the government's jobs
report for November due at 8:30 a.m. (1330 GMT) on Friday would
support the view of faster U.S. economic growth in the coming
year, which could stoke further gains for the dollar.
    The euro strengthened against the dollar and yen after
Reuters reported, citing senior sources with direct knowledge of
discussions, the European Central Bank will extend its bond
purchases beyond next March and consider sending a formal signal
at its policy meeting next week the asset purchase program will
eventually end. 
    The single currency was up 0.4 percent at $1.0631 and 0.5
percent higher at 121.63 yen.  
    Currency bid prices at 1:39PM (1839 GMT)
 Description      Last           U.S. Close  Pct Change
 Euro/Dollar      $1.0629        $1.0585     +0.42%
 Dollar/Yen       114.3500       114.4400    -0.08%
 Euro/Yen         121.57         121.17      +0.33%
 Dollar/Swiss     1.0122         1.0172      -0.49%
 Sterling/Dollar  1.2575         1.2504      +0.57%
 Dollar/Canadian  1.3316         1.3433      -0.87%
 Australian/Doll  0.7402         0.7382      +0.27%
 Euro/Swiss       1.0763         1.0775      -0.11%
 Euro/Sterling    0.8449         0.8465      -0.19%
 NZ               0.7061         0.7081      -0.28%
 Dollar/Norway    8.4418         8.5185      -0.90%
 Euro/Norway      8.9745         9.0255      -0.57%
 Dollar/Sweden    9.2549         9.2240      +0.65%
 Euro/Sweden      9.8370         9.7734      +0.65%

 (Additional reporting by Patrick Graham in London)
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