* Dollar index up over 9 pct for 2015
* Dollar up 10 pct against euro for year
* Dollar hits more than two-month low against yen
* Dollar hits more than 1-yr high against ruble
By Sam Forgione
NEW YORK, Dec 31 (Reuters) - The dollar was set to end 2015
with a more than 9 percent annual gain against a basket of
currencies on Thursday, despite a small decline in December,
with portfolio rebalancing from asset managers leading the
currency higher in thin trading.
Riding a rally dating back to May 2014, the greenback has
appreciated by a quarter in value against a basket of currencies
.DXY and by over 20 percent against the euro. For the year,
the greenback is up about 10 percent against the euro.
On Thursday, the euro hit a more than one-week low against
the dollar of $1.08750, with analysts attributing the move to
purchases of dollar-denominated assets from money managers
moving to meet minimum exposure requirements.
"It would be consistent to see a portfolio rebalancing that
may imply a greater exposure to the U.S. dollar," said Mazen
Issa, senior currency strategist at TD Securities in New York.
Against the yen, the dollar hit a more than two-month low of
120.005 yen. Analysts said weaker-than-expected U.S. Chicago
Purchasing Managers' Index data drove demand for the safe-haven
Japanese currency.
The dollar index, which measures the greenback against a
basket of six major rivals, hit a more than one-week high of
98.564. Trading volumes remained thin heading into year-end.
The dollar has advanced this year on views that the Federal
Reserve's start to its cycle of interest rate increases,
combined with steadily loose monetary policy from the European
Central Bank and Bank of Japan, would continue to bolster the
greenback.
The Fed hiked rates for the first time in nearly a decade
earlier this month and projections from Fed policymakers
indicated that they expect four more increases next year.
Analysts said that divergence in monetary policy would
remain a theme at least into the first quarter of 2016.
"The Fed could come back with a second hike in March, which
is not fully priced in, and the dollar should draw fresh support
from that," said Richard Franulovich, senior currency strategist
at Westpac in New York.
The dollar set a more than one-year high against the Russian
ruble on Thursday of 74.32 rubles RUB= after weakness in oil
prices early in the session. Russia is a key oil exporter.
The dollar was last up 0.87 percent against the Swiss franc
at 0.99700 franc CHF=EBS after hitting a more than three-week
high of 0.99940 franc.