December 28, 2017 / 4:16 PM / in 6 months

FOREX-Dollar index sinks to 4-week low; bitcoin sags

    * Dollar index on track for worst year since 2003
    * Australian dollar and New Zealand dollar hit 2-month highs
    * Bitcoin sheds over 30 pct since record peak near $20,000

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Dec 28 (Reuters) - The dollar fell to a four-week low against a basket of currencies on
Thursday on a less certain U.S. economic outlook after the passage of major tax cuts, while bitcoin
succumbed to renewed selling, marking an over 30 percent drop in less than two weeks.
    Commodity-linked currencies including the Australian and New Zealand dollars posted two-month highs
with copper prices hitting a four-year high and oil holding at its strongest levels since
mid-2015.
    "The dollar had gained on expectations of tax reform. Now that it's here, we are seeing it sold off,"
said Sireen Harajli, currency strategist at Mizuho in New York.
    Last week's passage of the biggest overhaul of the U.S. tax code in 30 years gave the dollar some
support, but markets are not confident that the tax reform will feed through quickly into increased
consumer confidence.    
    An index which tracks the greenback against six major currencies slipped as much as half a percent on
Thursday to its weakest since Dec. 1. It was last down 0.39 percent at 92.661. 
    The dollar index has dropped more than 9 percent this year, putting it on track for its biggest annual
slide since 2003. The greenback hit its strongest in 14 years at the start of 2017 on hopes that
U.S. President Donald Trump would implement pro-growth, pro-inflation measures. 
    But it has fallen on worries that Trump would not succeed in pushing through his economic agenda, and
as other countries' central banks have moved towards tightening monetary conditions, lessening the
divergence between their policies and that of the Federal Reserve. 
    The euro rose 0.50 percent to $1.1945 after touching its highest in a month. It has gained more than
13 percent so far this year, well on the way to its best annual performance since 2003.
    The Australian dollar rose 0.24 percent to $0.7786, while the New Zealand dollar was up 0.28 percent
at $0.7082.
    Bitcoin, the biggest and best-known cryptocurrency, has dwarfed any gains in traditional financial
markets this year, with a more than 1,400 percent rise. But since hitting record highs near $20,000 eleven
days ago, it has fallen on profit-taking, market observers said.
    "Professional people are taking money off the table and retail has followed," said Alexander Kravets,
co-founder and chief executive at New York-based XTRADE.IO. 
    It was last down 7.06 percent at $14,278.08 on the Luxembourg-based Bitstamp exchange.
    Earlier on Thursday, South Korea's government said it would impose additional measures to regulate
speculation in cryptocurrency trading.
    
    Currency bid prices at 10:51AM (1551 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1943        $1.1886     +0.48%         +13.60%     +1.1950     +1.1889
 Dollar/Yen       JPY=        112.9200       113.3400    -0.37%         -3.38%      +113.3500   +112.6700
 Euro/Yen         EURJPY=     134.88         134.74      +0.10%         +9.53%      +134.9500   +134.4800
 Dollar/Swiss     CHF=        0.9783         0.9861      -0.79%         -3.88%      +0.9863     +0.9780
 Sterling/Dollar  GBP=        1.3443         1.3395      +0.36%         +8.97%      +1.3456     +1.3395
 Dollar/Canadian  CAD=        1.2591         1.2653      -0.49%         -6.25%      +1.2661     +1.2580
 Australian/Doll  AUD=        0.7785         0.7767      +0.23%         +7.90%      +0.7809     +0.7765
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1687         1.1725      -0.32%         +9.05%      +1.1738     +1.1683
 Euro/Sterling    EURGBP=     0.8884         0.8869      +0.17%         +4.30%      +0.8893     +0.8866
 NZ Dollar/Dolar  NZD=        0.7081         0.7059      +0.31%         +2.02%      +0.7098     +0.7055
 Dollar/Norway    NOK=        8.2450         8.2685      -0.28%         -4.54%      +8.2805     +8.2245
 Euro/Norway      EURNOK=     9.8495         9.8305      +0.19%         +8.41%      +9.8795     +9.8227
 Dollar/Sweden    SEK=        8.2455         8.2747      +0.11%         -9.47%      +8.2757     +8.2329
 Euro/Sweden      EURSEK=     9.8491         9.8381      +0.11%         +2.81%      +9.8585     +9.8331
    

    
 (Additional reporting by Jemima Kelly in London, Masayuki Kitano in Singapore; Editing by Kevin Liffey
and Phil Berlowitz)
  
 
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