* Dollar hits 8 1/2-month highs vs currency basket
* Market awaits Thursday ECB meeting, OPEC on Friday
* ECB stimulus expectations lift European stocks
* Policy divergence lifts 2-yr U.S./euro yield gap to 9-year
high
By Nigel Stephenson
LONDON, Nov 30 (Reuters) - The dollar hit its strongest
since mid-March against a basket of its peers on Monday, at the
start of a week likely to highlight the divergent outlooks for
U.S. and euro zone interest rates that will set the tone for
markets in early 2016.
The euro fell to its weakest since mid-April against the
dollar, before a European Central Bank meeting on Thursday that
is expected to unveil fresh monetary easing measures.
The Federal Reserve, by contrast, is expected to raise U.S.
interest rates in December for the first time in nearly a
decade. Reflecting the policy divergence, the gap between U.S.
and euro zone two-year bond yields reached its widest in nine
years.
The prospect of more ECB stimulus, via an extension of its
bond-buying programme, lifted European shares. Wall Street was
expected to open modestly higher, according to stock index
futures ESc1 1YMc1 .
Oil prices, a major driver of markets this year, rose as
investors took positions before an OPEC meeting on Friday that
is not expected to change its output policy, which has led to a
glut in supply.
The ECB is widely expected to cut its already negative
deposit rate by at least 10 basis points and extend its
asset-purchase programme, which currently stands at 60 billion
euros a month.
"The market expects a broadening of the purchase programme
as well as a cut in the deposit rate, but expectations have gone
quite far since we had rumours last week of a possible two-tier
deposit rate cut," said Norbert Wuthe, rate strategist at
Bayerische Landesbank.
The dollar index .DXY , which measures the greenback
against a basket of currencies, touched its highest since
mid-March and was on track for a 3 percent gain on the month.
The euro EUR= fell 0.2 percent to $1.0566 while the yen
JPY= lost 0.2 percent to 123.05 per dollar. Sterling GBP=
hit a seven-month low just below $1.50.
"We are probably with the consensus, the Fed is going to
tighten, the ECB is going to ease, so the euro will go lower to
about 1.05 and then that will be your lot (for the year)," said
Sanjiv Shah, Chief Investment Officer with Sun Global in London.
The pan-European FTSEurofirst 300 index .FTEU3 was last up
0.5 percent.
"There is still some optimism ahead of the ECB meeting on
Thursday, which is the key market driver of the week," said
Carlo Alberto De Casa, analyst at ActivTrades in London.
Earlier, shares fell in Asia. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.8
percent and was on course to lose about 2.8 percent for the
month of November, after making its first gains in six months in
October.
Chinese stocks, which fell more than 5 percent on Friday,
were at one point down a further 3 percent on Monday before
closing marginally up on the day. The CSI300 index .CSI300 of
the largest listed companies in Shanghai and Shenzhen and the
Shanghai Composite .SSEC both ended up 0.3 percent.
China's currency was also in the spotlight, with the yuan
CNH=D3 jumping in offshore trade on suspected intervention by
Beijing, hours before the International Monetary Fund is
expected to grant it reserve status. It last traded at 6.431 to
the dollar, up 0.2 percent on the day.
Tokyo's Nikkei .N225 stocks index fell 0.7 percent on
concern over China and after Japanese industrial output data
undershot forecasts.
GLOBAL BENCHMARK
Brent crude LCOc1 , the global benchmark for oil prices,
rose 45 cents to $45.31 per barrel. It remained on track for a
10 percent fall this month.
While most analysts do not expect OPEC to cut output, they
are mindful that Saudi Arabia could be inching towards the idea
of working on price support measures with other oil producers.
Gold XAU= , which has fallen lately on the prospect of
higher U.S. interest rates, was on track for its worst month in
2 1/2 years. It last traded down 0.1 percent at $1,056.40 an
ounce.