By Ankika Biswas and Amruta Khandekar

(Reuters) -U.S. stocks lost momentum on the final trading day of an upbeat year that witnessed the benchmark S&P 500 hover around its all-time high this week on growing expectations the Federal Reserve will cut interest rates early next year.

All three indexes were in the red by early afternoon on Friday, with the tech-heavy Nasdaq leading losses on a decline in megacap stocks.

Some analysts have concerns about how equities will fare heading into 2024 after stellar gains in the last few months of this year, driven by hopes of a dovish Fed stance given cooling inflation.

“Expectations are that investors will lighten up early in the new year,” said Sam Stovall, chief investment strategist at CFRA Research.

Some market participants may be trying to get ahead of the selling that could take place at the start of 2024, Stovall added.

The S&P slipped on Friday after coming within a whisker of its all-time closing high reached in January 2022 in the previous session. If it manages to end above that level, it would confirm the index entered a bull market after it hit the bear market closing trough in October 2022.

The three main indexes were on track for both monthly and quarterly advances, as well as double-digit gains in 2023.

The Dow Jones hit a record high on Thursday, while the Nasdaq has outperformed Wall Street peers, rising 43% this year given the artificial intelligence boom and a surge in megacap stocks.

As per CME’s FedWatch tool, the probability of policymakers cutting the Fed funds target rate by 25 basis points in March stood at nearly 74%.

The year 2023 was marked by aggressive Fed rate hikes, which were finally halted in September, the U.S. banking crisis in March, an artificial intelligence stocks boom, the Israel-Hamas war, economic concerns that eventually bolstered the case for policy easing bets, among others.

The information technology, which is set to emerge as the top sectoral gainer in 2023, lagged on Friday with losses of 0.5%.

Nvidia and Meta Platforms, the top annual gainers on the S&P 500, fell 0.8% and 1.4%, respectively.

The small-cap Russell 2000 index, which rallied sharply over the last two months, was down 1.3%.

Investors are winding down for the holiday season. The markets will be closed on Monday, Jan. 1, on account of New Year’s Day.

At 12:05 p.m. ET, the Dow Jones Industrial Average was down 132.87 points, or 0.35%, at 37,577.23, the S&P 500 was down 24.42 points, or 0.51%, at 4,758.93, and the Nasdaq Composite was down 112.61 points, or 0.75%, at 14,982.53.

Among corporate movers, Uber Technologies and Lyft lost 2.3% and 4%, respectively, following a report that Nomura downgraded the ride-sharing platforms.

Declining issues outnumbered advancers for a 2.64-to-1 ratio on the NYSE and a 2.54-to-1 ratio on the Nasdaq.

The S&P index recorded 30 new 52-week highs and no new lows, while the Nasdaq recorded 58 new highs and 36 new lows.

(Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Shinjini Ganguli)

(Reuters) -Five Republican candidates are seeking to challenge former U.S. President Donald Trump for the party’s nomination in the November 2024 presidential contest to take on President Joe Biden, a Democrat who is running for reelection.

Here is a list of the Republican Party’s leading candidates:

DONALD TRUMP

Trump has embraced his indictments in four separate criminal cases – unprecedented for a former American president – and leveraged them to boost his popularity among Republicans and raise funds, helping to make him the Republican frontrunner with 61% in the latest Reuters/Ipsos polling.

Trump, 77, has called the indictments a political witch hunt to thwart his pursuit of a second four-year term, an assertion that the Justice Department has denied. If elected again, Trump has vowed revenge against his perceived enemies and has adopted increasingly authoritarian language, including saying he would not be a dictator except “on day one.”

He has promised other sweeping changes, including overhauling the federal civil service with loyalists and imposing tougher immigration policies such as mass deportations and ending birthright citizenship. He has also promised to gut Obamacare health insurance and impose harsher curbs on trade with China.

NIKKI HALEY

A former South Carolina governor and Trump’s ambassador to the United Nations, Haley, 51, has emphasized her relative youth compared to Biden, 81, and Trump, as well as her background as the daughter of Indian immigrants.

Haley has gained a reputation in the Republican Party as a solid conservative who has the ability to address issues of gender and race in a more credible fashion than many of her peers. She has also pitched herself as a stalwart defender of American interests abroad.

She earned 12% support among Republicans, according to the Reuters/Ipsos survey. In state-level polls, Haley has typically led rival Ron DeSantis in South Carolina and New Hampshire, where she has secured Governor Chris Sununu’s endorsement.

RON DESANTIS

The Florida governor has positioned himself to the right of Trump on several key social issues such as abortion, but his campaign has struggled to gain traction and he remains 50 percentage points behind the former president in the Reuters/Ipsos December poll with 11%.

DeSantis, 45, has fired staff and rebooted his campaign several times, but those steps have done little to boost his candidacy.

His campaign says it is focused on stopping Trump in Iowa, where the party will hold its first nominating contest in January. He got a lift on Nov. 6 when Iowa’s popular governor, Kim Reynolds, endorsed him, and rose slightly in a recent statewide poll.

VIVEK RAMASWAMY

A former biotechnology investor and executive, Ramaswamy, 38, started a company in 2022 to pressure firms to abandon environmental, social, and corporate governance initiatives. The political outsider has stoked grassroots chatter as a potential alternative to Trump but has failed to gain traction with just 7% support in the Reuters/Ipsos survey.

Ramaswamy is a fervent supporter of the former president, and has drawn his rivals’ ire for his verbal attacks at candidate debates. He has also voiced support for conspiracy theories, including suggesting that Trump supporters’ Jan. 6, 2021, attack on the U.S. Capitol was an inside job, and has pledged to pardon Trump if elected.

CHRIS CHRISTIE

Christie, 61, advised Trump’s 2020 White House campaign, but became a vocal critic of the former president after the Jan. 6 attack, and has stepped up his verbal attacks as Trump faced a growing number of criminal charges.

The former New Jersey governor and federal prosecutor has said he is increasingly convinced Trump will be convicted, and has cast himself as one of the few Republicans willing to directly take on Trump over his actions rather than appease him.

Christie saw just 2% support in the latest poll.

ASA HUTCHINSON

The former Arkansas governor launched his bid for the White House in April with a call for Trump to step aside to deal with the former president’s first indictment. Hutchinson, 73, has touted his experience leading his deeply conservative state as proof he can deliver on policies Republican voters care about, citing tax cuts and job creation initiatives.

Hutchinson only qualified for the first Republican debate and saw no support in the Reuters/Ipsos December poll.

(Compiled by the Washington newsroom; writing by Susan Heavey; editing by Jonathan Oatis)

By Ankika Biswas and Amruta Khandekar

(Reuters) – U.S. stocks were subdued on the final trading day of an upbeat year, while the benchmark S&P 500 hovered around its all-time high on growing expectations the Federal Reserve will cut interest rates early next year.

The S&P is within a whisker of its all-time closing high reached in January 2022. If it ends above that level, it would confirm the index entered a bull market after it hit the bear market closing trough in October 2022.

The three main indexes were on track for both monthly and quarterly advances, as well as double-digit gains in 2023. They also eyed their ninth straight weekly gain, with the S&P set for its longest weekly winning streak since 2004.

The Dow Jones hit a record high on Thursday, while the Nasdaq is on track for its strongest yearly jump since 2003, sharply rebounding from a slump last year.

With the Fed’s aggressive rate hikes cooling the U.S. labor market as well as pressuring the economy, investors have amplified their bets of rate cuts heading into 2024.

As per CME’s FedWatch tool, the probability of policymakers cutting the Fed funds target rate by 25 basis points in March stood at nearly 73%.

“Sentiment has changed dramatically over the last two months. The expectation now that the Fed is going to be cutting rates next year has put an additional bid underneath the market,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest.

While the optimism could continue in the near term, Nolte pointed to risks of sticky inflation in 2024 that could force the Fed to keep interest rates elevated.

The year 2023 was marked by aggressive Fed rate hikes, which were finally halted in September, the U.S. banking crisis in March, an artificial intelligence stocks boom, the Israel-Hamas war, economic concerns that eventually bolstered the case for policy easing bets, among others.

The information technology is set to emerge as the top sectoral gainer in 2023, up 57.2%, benefiting from an AI exuberance and a surge in megacap stocks, while the defensive utilities sector was the worst hit with a 10.4% decline.

Nvidia and Meta Platforms were the top annual gainers on the S&P 500, eyeing around three-fold gains.

At 9:34 a.m. ET, the Dow Jones Industrial Average was up 44.76 points, or 0.12%, at 37,754.86, the S&P 500 was up 2.67 points, or 0.06%, at 4,786.02, and the Nasdaq Composite was up 1.16 points, or 0.01%, at 15,096.29.

Among corporate movers, Uber Technologies and Lyft lost 0.5% and 2.9%, respectively, following a report that Nomura downgraded the ride-sharing platforms.

Hut 8 rose 1.3% after the bitcoin miner said the U.S. court granted approval to proceed with full mining operations plan in connection with Celsius Network bankruptcy proceedings.

Investors are winding down for the holiday season, with markets staying shut on Monday, Jan. 1, on account of New Year’s Day.

Declining issues outnumbered advancers for a 1.47-to-1 ratio on the NYSE and a 1.31-to-1 ratio on the Nasdaq.

The S&P index recorded 10 new 52-week highs and no new lows, while the Nasdaq recorded 28 new highs and 14 new lows.

(Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Shinjini Ganguli)

By Ankika Biswas and Amruta Khandekar

(Reuters) -U.S. stocks were set to open subdued on the final day of an upbeat year which has seen the benchmark S&P 500 rally close to a record peak due to growing expectations the Federal Reserve will cut interest rates early next year.

The S&P is within a whisker of its all-time closing high reached in January 2022. If it ends above that level, it would confirm the index entered a bull market after it hit the bear market closing trough in October 2022.

The three main indexes were on track for both monthly and quarterly advances, setting them up for double-digit gains in 2023. They also eyed their ninth straight weekly gain, with the S&P set for its longest weekly winning streak since 2004.

The Dow Jones hit a record high on Thursday, while the Nasdaq is on track for its strongest yearly jump since 2003, sharply rebounding from a slump last year.

With the Fed’s aggressive rate hikes cooling the U.S. labor market as well as pressuring the economy, investors have amplified their bets of rate cuts heading into 2024.

As per CME’s FedWatch tool, the probability of policymakers cutting the Fed funds target rate by 25 basis points in March stood at 70.1%.

“Sentiment has changed dramatically over the last two months. The expectation now that the Fed is going to be cutting rates next year has put an additional bid underneath the market,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest.

While the optimism could continue in the near term, Nolte pointed to risks of sticky inflation in 2024 that could force the Fed to keep interest rates elevated.

The year 2023 was marked by aggressive Fed rate hikes, which were finally halted in September, the U.S. banking crisis in March, an artificial intelligence stocks boom, the Israel-Hamas war, economic concerns that eventually bolstered the case for policy easing bets, among others.

The information technology is set to emerge as the top sectoral gainer in 2023, up 56.8%, benefiting from an AI exuberance and a surge in megacap stocks, while the defensive utilities sector was the worst hit with a 10.1% decline.

Nvidia and Meta Platforms were the top annual gainers on the S&P 500, eyeing around three-fold gains.

Investors are winding down for the holiday season, with markets staying shut on Monday, Jan. 1, on account of New Year’s Day.

At 8:13 a.m. ET, Dow e-minis were down 6 points, or 0.02%, S&P 500 e-minis were down 2 points, or 0.04%, and Nasdaq 100 e-minis were down 10.5 points, or 0.06%.

Among corporate movers, Uber Technologies and Lyft lost 1.1% and 2.7%, respectively, in premarket trading, following a report that Nomura downgraded the ride-sharing platforms.

(Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Shinjini Ganguli)

(Reuters) – U.S. stock index futures edged up in light trading on the final day of a turbulent 2023, with the benchmark S&P 500 and the Dow hovering around record-highs on growing expectations the Federal Reserve will cut interest rates early next year.

The Dow touched its all-time peak on Thursday, while the S&P 500 and the tech-heavy Nasdaq also inched closer to their one-year highs. The benchmark S&P was within a whisker of its Jan. 4 2022 intraday high.

The three main indexes also eyed their ninth straight weekly gain as well as both monthly and quarterly advances.

They were set for double-digit gains in 2023, with the Nasdaq on track for its strongest yearly jump since 2003, sharply rebounding from a slump last year.

With the Fed’s aggressive rate hikes cooling the U.S. labor market as well as pressuring the economy, investors have amplified their bets of rate cuts heading into 2024.

As per CME’s FedWatch tool, the probability of policymakers cutting the Fed funds target rate by 25 basis points in March stood at 70.1%.

The year 2023 was marked by aggressive Fed rate hikes, which were finally halted in September, the U.S. banking crisis in March, an artificial intelligence stocks boom, the Israel-Hamas war, economic concerns that eventually bolstered the case for policy easing bets, among others.

The information technology is set to emerge as the top sectoral gainer in 2023, up 56.8%, benefiting from an AI exuberance and a surge in megacap stocks, while the defensive utilities sector was the worst hit with a 10.1% decline.

Nvidia and Meta Platforms were the top annual gainers on the S&P 500, eyeing around three-fold gains.

Investors are winding down for the holiday season, with markets staying shut on Monday, Jan. 1, on account of New Year’s Day.

At 5:39 a.m. ET, Dow e-minis were up 17 points, or 0.04%, S&P 500 e-minis were up 2.75 points, or 0.06%, and Nasdaq 100 e-minis were up 21.75 points, or 0.13%.

Among corporate movers, Uber Technologies and Lyft lost 1.3% and 4.8%, respectively, in premarket trading, on report that Nomura downgraded the ride-sharing platforms.

(Reporting by Ankika Biswas in Bengaluru; Editing by Shinjini Ganguli)

BEIJING (Reuters) -Chinese online retailer JD.com said on Friday that it won a lawsuit against rival Alibaba, which was fined 1 billion yuan ($140.68 million) for monopolistic practices.

The High People’s Court of Beijing ruled that Alibaba Group Holding Limited along with Zhejiang Tmall Network Co and Zhejiang Tmall Technology Co had abused their market dominance and adopted monopolistic practices known as “choosing one from two” causing JD.com severe damage, JD.com said in a statement published on its official WeChat account.

JD.com said it has nothing more to add beyond the statement.

“This ruling is not only a fair decision for JD’s resistance against the ‘choose one out of two’ monopoly, but a landmark moment in upholding market fairness and competition order through the rule of law,” the statement said. “It will be a significant moment in China’s anti-monopoly legal process.”

An Alibaba spokesperson told Reuters they were aware of the ruling and “respect the court’s decision”.

Alibaba was fined a record $2.75 billion in an anti-trust probe by Chinese regulators in 2021 which stated that it had abused its market dominance.

The two e-commerce giants in China had criticised each other for a practice called choosing one out of two, citing brands and merchants who had reportedly been told that if they wanted to operate on their platform, they have to do so exclusively.

($1 = 7.1083 Chinese yuan renminbi)

(Reporting by Sophie Yu, Li Qiaoyi, and Casey Hall; editing by Jason Neely)

By John Kruzel

WASHINGTON (Reuters) -The Colorado Republican Party on Wednesday asked the U.S. Supreme Court to intervene after Colorado’s top court disqualified former President Donald Trump from appearing on the state’s Republican primary ballot, an attorney for the Republican group said.

The appeal comes after the Colorado Supreme Court on Dec. 19 disqualified Trump because of his role in the Jan. 6, 2021 attack on the U.S. Capitol by his supporters. The court barred Trump under a U.S. constitutional provision prohibiting anyone who “engaged in insurrection or rebellion” from holding public office.

The Colorado Republican Party is being represented by Jay Sekulow of the conservative litigation firm the American Center for Law & Justice.

Trump, the frontrunner for the Republican 2024 presidential nomination, is expected to file his own appeal. The state high court had put its decision on hold until Jan. 4, stating that Trump would remain on the ballot if he appealed.

The Colorado court’s ruling marked the first time in history that Section 3 of the U.S. Constitution’s Fourteenth Amendment – the so-called disqualification clause – had been used to deem a presidential candidate ineligible for the White House.

The 4-3 Colorado Supreme Court ruling reversed a lower court judge’s conclusion that Trump engaged in insurrection by inciting his supporters to violence, but as president, he was not an “officer of the United States” who could be disqualified under the Fourteenth Amendment.

The Colorado court concluded that Trump’s role instigating violence at the Capitol as lawmakers met to certify the results of the 2020 election constituted engaging in insurrection, and that the presidency is covered by the insurrection provision.

The attack was an attempt by Trump’s supporters to overturn his 2020 election loss to Democratic President Joe Biden, which Trump falsely claims was the result of fraud.

Courts have rejected several lawsuits seeking to keep Trump off the primary ballot in other states. Minnesota’s top court rebuffed an effort to disqualify Trump from the Republican primary in that state but did not rule on his overall eligibility to serve as president.

(Reporting by John Kruzel; Editing by Sonali Paul and Lincoln Feast.)

By Karen Brettell

NEW YORK (Reuters) -The dollar dipped against the Japanese yen on Thursday on expectations the Federal Reserve will cut interest rates next year, but rebounded from earlier losses against the euro in choppy trading.

The greenback has declined as expectations of rate cuts have increased, notably after the Fed’s unexpectedly dovish stance at its December meeting.

Markets see the Fed’s first rate cut coming in March and are pricing in 155 basis points of easing by next December.

“The market has gotten even more aggressive on Fed easing,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

But trading this week is volatile with thin volumes and many investors having closed their books for the year.

The dollar dropped as low as 140.27 yen, its lowest level since July 28, and was last down 0.28% on the day at 141.42.

The move came as investors appeared to close short positions in popular funding currencies such as the yen, in which hedge funds and other investors use the proceeds from selling a currency to invest in other assets.

Investors short the funding currencies “are evening up,” said Chandler. “This year it’s been a story of Fed tightening and BOJ teasing the market with the tweaking of the yield curve adjustment. Next year the position is going to be reversed, the market expects the BOJ to raise rates, and the Fed to ease rates. A fundamental driver’s going to change.”

Net shorts in the yen against the U.S. dollar fell to 64,902 contracts in the latest week ending Dec. 19, compared with 81,131 the previous week, according to data from the Commodity Futures Trading Commission.

With inflation exceeding its 2% target for well over a year, many market players expect the Bank of Japan to raise rates next year with some betting on the chance of action as early as in January.

BOJ Governor Kazuo Ueda, however, said he was in no rush to unwind ultra-loose monetary policy as the risk of inflation running well above 2% and accelerating was small, public broadcaster NHK reported on Wednesday.

The greenback remains on track for a 7.86% gain against the Japanese currency this year.

The Swiss franc reached 0.8333 per dollar, its strongest level since January 2015 when the Swiss National Bank discontinued its policy of having a minimum exchange rate against the euro.

The dollar was last up 0.06% at 0.8439 and is on pace for an 8.75% loss against the Swiss currency this year.

The dollar index, which measures the U.S. currency against six rivals, fell to a fresh five-month low of 100.61, before changing direction to last be up 0.34% on the day at 101.21. The index is on course for a 2.20% decline this year, snapping two straight years of strong gains.

U.S. data on Thursday showed that the number of Americans filing initial claims for unemployment benefits rose last week, indicating the labor market continues to cool in the year’s fourth quarter.

The euro was last down 0.37% at $1.1064, having touched a five-month peak of $1.11395 earlier in the session. The single currency is heading for a yearly gain of 3.26%.

Sterling rose to $1.2825, its highest level since Aug. 1, and was last down 0.57% at $1.2728. The pound is on track for a 5.23% return this year.

Bitcoin fell 2.34% to $42,455.

========================================================

Currency bid prices at 3:15PM (2015 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 101.2100 100.8900 +0.34% -2.203% +101.2900 +100.6100

Euro/Dollar $1.1064 $1.1105 -0.37% +3.26% +$1.1140 +$1.1056

Dollar/Yen 141.4200 141.8200 -0.28% +7.86% +141.7000 +140.2700

Euro/Yen 156.47 157.49 -0.65% +11.53% +157.4500 +155.8400

Dollar/Swiss 0.8439 0.8432 +0.06% -8.75% +0.8446 +0.8333

Sterling/Dollar $1.2728 $1.2799 -0.57% +5.23% +$1.2827 +$1.2713

Dollar/Canadian 1.3229 1.3210 +0.15% -2.35% +1.3235 +1.3183

Aussie/Dollar $0.6834 $0.6848 -0.20% +0.26% +$0.6871 +$0.6824

Euro/Swiss 0.9335 0.9361 -0.28% -5.66% +0.9363 +0.9259

Euro/Sterling 0.8691 0.8675 +0.18% -1.73% +0.8714 +0.8670

NZ $0.6331 $0.6341 -0.17% -0.30% +$0.6369 +$0.6325

Dollar/Dollar

Dollar/Norway 10.1910 10.1000 +1.05% +3.99% +10.2150 +10.0740

Euro/Norway 11.2780 11.2159 +0.55% +7.47% +11.2980 +11.1925

Dollar/Sweden 9.9884 9.9395 +0.19% -4.03% +10.0009 +9.9113

Euro/Sweden 11.0500 11.0289 +0.19% -0.89% +11.0613 +11.0161

(Reporting by Karen Brettell in New YorkAdditional reporting by Alun John in LondonEditing by Christina Fincher and Matthew Lewis)

By Karen Brettell

NEW YORK (Reuters) – The dollar fell against the Japanese yen but clawed back most of its earlier losses against the euro on Thursday in thin trading as investors looked ahead to Federal Reserve interest rate cuts next year.

The dollar index, which measures the U.S. currency against six rivals, fell to a fresh five-month low of 100.61 and was last down 0.05% on the day at 100.82. The index is on course for a 2.58% decline this year, snapping two straight years of strong gains.

The greenback has declined as expectations of rate cuts have increased, notably after the Fed’s unexpectedly dovish stance at its December meeting.

“The market has gotten even more aggressive on Fed easing,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

Markets see the Fed’s first rate cut coming in March and are pricing in 156 basis points of easing by next December.

The day’s bigger mover was the Japanese yen. The dollar dropped as much as 0.82% to 140.66 yen, its lowest since July 28, and was last down 0.73% at 140.78. The greenback remains on track for a 7.38% gain against the currency this year.

The yen is a popular funding currency, in which hedge funds and other investors use the proceeds from selling the currency to invest in other assets. However, as the Bank of Japan (BOJ) appears closer to ending its negative interest rate policy many traders are exiting these positions.

Investors short the funding currencies “are evening up,” said Chandler. “This year it’s been a story of Fed tightening and BOJ teasing the market with the tweaking of the yield curve adjustment. Next year the position is going to be reversed, the market expects the BOJ to raise rates, and the Fed to ease rates. A fundamental driver’s going to change.”

Net shorts in the yen against the U.S. dollar fell to 64,902 contracts in the latest week ending Dec. 19, compared to 81,131 the previous week, according to data from the Commodity Futures Trading Commission.

With inflation exceeding its 2% target for well over a year, many market players expect the BOJ to raise rates next year with some betting on the chance of action as early as in January.

BOJ Governor Kazuo Ueda, however, said he was in no rush to unwind ultra-loose monetary policy as the risk of inflation running well above 2% and accelerating was small, public broadcaster NHK reported on Wednesday.

The euro was last down 0.02% at $1.1103, having touched a five-month peak of $1.11395 earlier in the session. The single currency is heading for a yearly gain of 3.62%, its strongest performance since 2020.

Sterling rose to $1.2825, its highest since August 1, and was last down 0.21% at $1.2772. The pound is on track for a 5.61% return this year, its biggest since 2017.

The Swiss franc firmed to 0.8339 per dollar, its strongest level since January 2015 when the Swiss National Bank discontinued its policy of having a minimum exchange rate against the euro.

Bitcoin fell 1.87% to $42,658.

========================================================

Currency bid prices at 10:00AM (1500 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 100.8200 100.8900 -0.05% -2.580% +101.1000 +100.6100

Euro/Dollar $1.1103 $1.1105 -0.02% +3.62% +$1.1140 +$1.1073

Dollar/Yen 140.7800 141.8200 -0.73% +7.38% +141.7000 +140.6550

Euro/Yen 156.31 157.49 -0.75% +11.41% +157.4500 +156.2400

Dollar/Swiss 0.8351 0.8432 -0.94% -9.66% +0.8429 +0.8339

Sterling/Dollar $1.2772 $1.2799 -0.21% +5.61% +$1.2827 +$1.2738

Dollar/Canadian 1.3191 1.3210 -0.14% -2.64% +1.3232 +1.3189

Aussie/Dollar $0.6845 $0.6848 -0.04% +0.41% +$0.6871 +$0.6824

Euro/Swiss 0.9270 0.9361 -0.97% -6.32% +0.9363 +0.9273

Euro/Sterling 0.8691 0.8675 +0.18% -1.73% +0.8714 +0.8670

NZ $0.6352 $0.6341 +0.18% +0.05% +$0.6369 +$0.6327

Dollar/Dollar

Dollar/Norway 10.1170 10.1000 +0.50% +3.42% +10.1590 +10.0740

Euro/Norway 11.2378 11.2159 +0.20% +7.09% +11.2949 +11.1925

Dollar/Sweden 9.9459 9.9395 +0.13% -4.44% +9.9740 +9.9113

Euro/Sweden 11.0436 11.0289 +0.13% -0.95% +11.0597 +11.0161

(Reporting By Karen Brettell; Additional reporting by Alun John in London; Editing by Christina Fincher)

By Ankur Banerjee

SINGAPORE (Reuters) -The dollar nursed steep losses on Thursday and was headed for a yearly decline, while the Swiss franc perched at a nine-year peak and the euro at a five-month high on expectations that 2024 will bring deep rate cuts.

With the year coming to a close, thin liquidity and limited moves are expected until the New Year.

The dollar index, which measures the U.S. currency against six rivals, fell to a fresh five-month low of 100.76. The index is on course for a 2.6% decline this year, snapping two straight years of strong gains.

Investor focus remains on the timing of the interest rate cuts from the Federal Reserve, with markets pricing in a 88% chance of a cut in March 2024, according to CME FedWatch tool. Futures imply more than 150 basis points of Fed easing next year.

Some analysts though remain unconvinced the U.S. central bank would be so aggressive.

“We still believe that a March policy change toward easing is much too early and there is quite a bit of potential for a dollar rally if and when such action does not materialize,” Monex USA analysts said in a note.

While the Fed took an unexpectedly dovish stance in its December meeting, opening the door to rate cuts next year, other major central banks, including European Central Bank retained their stance of needing to keep rates higher for longer.

Markets though are still pricing in as much as 165 basis points of rate cuts from the ECB next year.

“The European and UK economies are in a much more precarious state and we believe this will force their respective central banks to cut interest rates both before they are fully ready and before the Fed does so,” said the Monex USA analysts, noting the divergence in the outlooks for the U.S. and European economies.

The euro was last at $1.1117, having touched a fresh five-month peak of $1.11225 earlier in the session. The single currency headed for a yearly gain of 3.7%, its strongest performance since 2020.

The Swiss franc firmed to $0.8395, its strongest level against the dollar since January 2015, when the Swiss National Bank discontinued its policy of having a minimum exchange rate against the euro.

Meanwhile, sterling rose to $1.2816, its highest since Aug. 10. The pound is headed for a 6% gain in the year, its strongest performance since 2017.

Investors expect that the Bank of England will not be able to cut rates as much as the Fed and ECB, given inflation is running higher in the UK. [GBP/]

That has widened the gap between British bond yields and those in the U.S. and Europe, making them look more attractive and boosting the pound.

In Asia, the Japanese yen strengthened 0.52% to 141.09 per dollar, inching closer to a five-month peak of 140.95 it touched earlier this month.

The Asian currency is up 4% against the dollar in December, heading for its second straight month of gains on increased expectations that the Bank of Japan may soon move away from its ultra-loose monetary policy.

The central bank, however, stuck to its policy earlier this month and Governor Kazuo Ueda on Wednesday said he was in no rush to unwind ultra-loose monetary policy as the risk of inflation running well above 2% and accelerating was small.

For the year though yen is down 7% against the dollar.

Rate cut bets have also boosted riskier currencies, with the Australian dollar and the New Zealand dollar perched at fresh five-month peaks. The Aussie was last little changed at $0.6844, while the kiwi was at $0.6343.

The dollar weakness has also lifted emerging markets currencies. MSCI’s emerging market currency index touched a fresh 20-month high and was on track for its strongest year since 2017 with yearly gains of 5%.

(Reporting by Ankur Banerjee in Singapore. Editing by Sam Holmes)