Wednesday December 10, 2014 - 23:12:36 GMT
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Reuters - www.reuters.com
FOREX-Market cuts bullish dollar bets for now, kiwi rallies on RBNZ
* Dollar extends fall vs yen, hits 117.70 low
* NZ dollar rallies, markets see RBNZ as less dovish
* CAD, NOK hapless as crude oil falls further
By Ian Chua
SYDNEY, Dec 11 (Reuters) - The dollar remained on the backfoot early on Thursday, having fallen for a third session against the yen as the market unwound stretched positions to lock in profits with just one full week of activity left this year.
The dollar fell as far as 117.70 yen, continuing to pull back from a seven-year peak of 121.86 set on Monday as crowded long-dollar trades were thinned out.
The euro retested Tuesday's high of $1.2448, recovering from a 2-1/2 year trough of $1.2247. Even the Australian dollar popped back above 83 U.S. cents from a 4-1/2 year low of $0.8223.
Still, traders said the greenback's broad longer-term uptrend remained intact and would probably resume next year, especially as speculation on the timing of an interest rate hike by the Federal Reserve heats up.
In the near term, whether the Aussie can continue to hold above 83 cents depends on local employment data due at 0030 GMT. Any disappointment will likely to bring out the bears again.
Its New Zealand peer fared better, much to the chagrin of the country's central bank which left interest rates steady in a widely expected decision.
The kiwi soared more than a full U.S. cent to $0.7834 , pulling further away from a 2-1/2 year low of $0.7609 set on Tuesday.
Traders said some in the market had anticipated the central bank would go a step further by adopting a neutral bias. Instead the Reserve Bank of New Zealand said further rate hikes could be expected at a later stage.
That was a "hawkish surprise to the markets," said Westpac senior currency strategist Imre Speizer, adding the magnitude of the kiwi's rally probably reflected market positioning.
"However, given interest rates have hardly moved, we expect the upside to be limited," he said.
The greenback managed to outperform its Canadian and Norwegian counterparts, which remained under pressure along with oil prices.
The dollar scaled fresh five-year peaks of C$1.1503 and 7.2243 crowns after U.S. crude slid to five-year lows near $60 a barrel. (Editing by Alan Crosby)
© Thomson Reuters 2014. All rights reserved.
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