* Year-end, safe-haven flows boost dollar
* Hopes for more robust U.S. recovery also help
* Euro/dollar falls below $1.4300
* Swiss franc stronger vs dollar and euro (Updates prices, adds comment)
By Steven C. Johnson
NEW YORK, Dec 18 (Reuters) - The dollar rose against most major currencies on Friday and was headed for its best weekly gain against the euro since April as investors who sold the U.S. currency for most of 2009 bought it back as the year-end neared.
The euro fell below $1.43 for the first time since early September before recovering some losses, while the dollar rose against the Japanese yen for a fourth consecutive day.
Signs of improvement in the U.S. economy have helped the dollar in recent days, as did the Federal Reserve's pledge this week to wind down most emergency lending by February, lifting hopes of a more robust U.S. recovery in 2010.
The dollar and the Swiss franc attracted safe-haven flows Friday after Iraq said Iranian soldiers had crossed into its territory and raised the Iranian flag at an oil field whose ownership is in dispute. Tehran denied the report.
For more on Iraq, see [ID:nLDE5BH1BI]
Traders said all these factors encouraged a bout of position squaring, with investors buying back the dollar and taking profits on trades that had helped push the U.S. currency down more than 15 percent between March and November <.DXY>.
"There's a winding down of activity into year end, with people taking profits on core trades," said Samarjit Shankar, managing director of global FX strategy at BNY Mellon in Boston. "But the dollar has been well-supported lately, and given the positive surprises in U.S. data lately, people are looking at the U.S. recovery story now as a glass half full."
Strong jobs and consumer data have some betting the Fed may raise interest rates sooner than expected in 2010, which would increase the appeal of dollar-denominated assets.
The euro hit $1.4262 <EUR=>, its lowest level since Sept. 4, before recovering to $1.4337, little changed from late Thursday. It hit a 16-month high above $1.51 in November.
On the week, the euro shed about 2 percent, its worst slide since April. Fiscal woes in euro zone member Greece, which had its credit rating cut by two ratings agencies recently, have hurt the currency.
The dollar hit a six-week high against the yen near 91 yen and last changed hands at 90.30 yen <JPY=>, up 0.4 percent,
The Bank of Japan kept interest rates steady but changed its definition of long-term price stability, saying it would not tolerate zero inflation or falling prices. [ID:nT289621]
Sterling fell 0.1 percent <GBP=> to $1.6142 after earlier hitting a two-month low.
IRAQ WORRIES LIFT SWISS FRANC
The Iraq worries and rumors of a coup in Pakistan that were quickly denied pushed the dollar against the Swiss franc, falling 0.5 percent to 1.0422 francs <CHF=>.
The euro shed 0.5 percent to 1.4948 francs <EURCHF=>, taking it below the perceived threshold of 1.50 francs at which investors suspected the Swiss National Bank would intervene to weaken the currency.
The SNB sold francs to fight deflation earlier this year, but some analysts said modest improvement in the Swiss economy may mean the SNB is less eager to intervene now.
The euro's weekly fall against the greenback was its third in a row. But BNY Mellon's Shankar said investors may soon start buying assets and currencies offering higher returns than the dollar.
"We are fully expecting at least some renewed forays into higher-yielders, so we'll have to wait until next year to see how this all plays out," he said. (Additional reporting by Nick Olivari and Gertrude Chavez-Dreyfuss; Editing by Leslie Adler)