* ECB delays rate hike, readies to lend more to banks * Latest ECB move knocks neighboring European currencies * Dollar index rallies to highest since December * Canadian, Aussie dollar hover at two-month lows * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh (Updates market action, changes dateline, previous LONDON) By Richard Leong NEW YORK, March 7 (Reuters) - The euro sank on Thursday to its lowest against the dollar since June 2017 after the European Central Bank postponed the timing of its first post-crisis rate hike to 2020 at the earliest and launched a new round of cheap loans to banks. The ECB's decision to tweak its forward guidance on rates was a surprise for many investors. The central bank also cut its growth and inflation forecasts through 2021. "The ECB has no choice," said Joseph Trevisani, senior analyst at FX Street in New York. "There are a lot of internal problems which are impediments to growth." Anemic domestic demand and political tensions will unlikely be resolved by an easy ECB policy stance and would keep downward pressure on the euro, analysts said. Currencies of European countries not part of the euro zone, such as the Swedish crown and Hungarian forint, fell hard after the ECB's decision, which is aimed at battling deteriorating regional business and consumer activities, analysts said. On the other hand, the greenback reached a new 2019 high against a basket of currencies that includes the euro as traders bet the United States would fare better than Europe in the coming months despite some soft patches in the U.S. economy. The euro sagged to $1.1206, its lowest level since mid-2017. It was last 0.81 percent lower at $1.1216 in midday U.S. trading. The euro is at risk of falling to $1.10 in the coming weeks, analysts said. The Swedish crown fell to its weakest since Dec. 15, 2016 at 9.4185 per dollar. It was down 0.62 percent at 10.581 per euro, Reuters data showed. The Hungarian forint shed 0.99 against the dollar and dipped 0.1 percent against the euro. The ICE index that tracks the dollar against a basket of six major currencies was up 0.63 percent at 97.483 after touching 97.499, which was its highest since Dec. 17. "I don't think you will get much more on the upside," Aaron Hurd, senior portfolio manager in the currency group at SSGA in Boston, said of the greenback. "It will likely stay in a range." Among other G10 currencies, the Canadian and Australian dollars hovered at two-month lows after investors bet their central banks would ease monetary policy as their economies slow. The Aussie was down 0.06 percent at $0.7028, while the loonie was up 0.10 percent at C$1.3428. ======================================================== Currency bid prices at 12:15PM (1715 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1212 $1.1305 -0.82% -2.24% +1.1321 +1.1207 Dollar/Yen JPY= 111.5700 111.7500 -0.16% +1.18% +111.8500 +111.4900 Euro/Yen EURJPY= 125.11 126.35 -0.98% -0.88% +126.4300 +125.0800 Dollar/Swiss CHF= 1.0108 1.0048 +0.60% +3.00% +1.0114 +1.0036 Sterling/Dollar GBP= 1.3105 1.3169 -0.49% +2.73% +1.3185 +1.3090 Dollar/Canadian CAD= 1.3423 1.3440 -0.13% -1.57% +1.3448 +1.3413 Australian/Doll AUD= 0.7028 0.7032 -0.06% -0.30% +0.7051 +0.7022 ar Euro/Swiss EURCHF= 1.1335 1.1364 -0.26% +0.72% +1.1368 +1.1320 Euro/Sterling EURGBP= 0.8554 0.8583 -0.34% -4.78% +0.8625 +0.8554 NZ NZD= 0.6763 0.6767 -0.06% +0.68% +0.6791 +0.6764 Dollar/Dollar Dollar/Norway NOK= 8.7465 8.6634 +0.96% +1.25% +8.7531 +8.6563 Euro/Norway EURNOK= 9.8105 9.7968 +0.14% -0.96% +9.8238 +9.7828 Dollar/Sweden SEK= 9.4359 9.2986 +0.63% +5.27% +9.4429 +9.2886 Euro/Sweden EURSEK= 10.5820 10.5162 +0.63% +3.10% +10.5855 +10.5059 (Additional reporting by Tommy Wilkes in LONDON Editing by Raissa Kasolowsky and Susan Thomas)
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