GLOBAL MARKETS-Dollar eases, Europe shares rally as Dec rate hike seen

* European shares touch three-month high
* U.S. flat in choppy trade after day-earlier rally
* Dollar pulls back after four sessions of gains
* U.S. crude dips below $40 a barrel

(Updates to late afternoon)
By Lewis Krauskopf
NEW YORK, Nov 19 (Reuters) - The U.S. dollar pulled back on
Thursday after four sessions of gains and major European stock
markets rallied as expectations built that the U.S. Federal
Reserve will hike interest rates next month.
U.S. stocks were slightly lower, while U.S. crude again
dipped below $40 a barrel before rebounding.
U.S. data showed fewer Americans filed for unemployment
benefits last week, further supporting the view that the Federal
Reserve will raise interest rates in December. urn:newsml:reuters.com:*:nL1N13E113
"This morning's data simply confirmed that the economic
landscape is healthy enough for the Fed to continue with its
desired timing for liftoff, which for now the market is
expecting to be December," said Ian Lyngen, senior government
bond strategist at CRT Capital in Stamford, Connecticut.
Futures traders on Thursday placed a 72-percent chance of
the Fed raising rates next month, up from 68 percent following
the release of the Fed minutes on Wednesday afternoon, according
to the CME Group's FedWatch.
The Dow Jones industrial average .DJI fell 4.44 points, or
0.03 percent, to 17,732.72, the S&P 500 .SPX lost 2.11 points,
or 0.1 percent, to 2,081.47 and the Nasdaq Composite .IXIC
dropped 2.01 points, or 0.04 percent, to 5,073.19.
"We would not be surprised if we limp through to
mid-December," said David Carter, chief investment officer at
Lenox Wealth Advisors in New York. "It's less than a month away
from the Fed decision and I'm not sure anyone wants to put big
trades on before that."
The healthcare sector .SPXHC weighed on the benchmark S&P
500 index after insurer UnitedHealth Group (N:UNH) UNH.N cut its
profit forecast. Mobile payments company Square (N:SQ) SQ.N soared 44
percent in its highly-anticipated market debut. urn:newsml:reuters.com:*:nL3N13E3BY
The pan-European FTSEurofirst 300 index .FTEU3 climbed 0.4
percent, helped by a jump in shares of food and facilities group
Sodexo EXHO.PA , which said it would cut costs to cope with a
volatile global economy. urn:newsml:reuters.com:*:nL8N13E2P4
Markets in London .FTSE and Frankfurt .GDAXI were up 0.8
percent and 1.1 percent, respectively. Japan's Nikkei .N225
rose 1.1 percent, and an index of major global markets
.MIWD00000PUS rose 0.7 percent.
The U.S. dollar index .DXY , measured against a basket of
currencies, was off 0.7 percent after hitting a seven-month high
a day earlier. The euro rose EUR= 0.7 percent against the
dollar. urn:newsml:reuters.com:*:nL1N13E1IU
"That the dollar is lower signals that this outcome (of the
December Fed meeting) is increasingly discounted, particularly
in the wake of recent, very heavy USD buying," said Todd Elmer,
Citi's Asian head of G10 FX strategy.
Yields on longer-dated Treasuries fell as investors braced
for the Fed to gradually raise rates after December.
urn:newsml:reuters.com:*:nL1N13E1DF
Benchmark 10-year Treasury US10YT=RR prices rose 7/32 for
a yield of 2.2465 percent, while the price for the 30-year note
US30YT=RR rose 26/32 for a yield of 3.0016 percent.
U.S. crude CLc1 settled down 0.5 percent at $40.54 a
barrel, after dipping below $40 for a second day, with rising
U.S. stockpiles serving as the most visible evidence of
oversupply in oil markets. Brent crude LCOc1 edged up 0.3
percent to $44.28 a barrel. urn:newsml:reuters.com:*:nL3N13E12N
Spot gold XAU= rose 1 percent, rebounding from near
six-year lows.
The 19-commodity Thomson Reuters/Core Commodity CRB Index
.TRJCRB rose 0.3 percent after hitting a roughly 13-year low a
day earlier. A weaker dollar meant that commodities denominated
in the greenback become more affordable for holders of other
currencies.
"The dollar is certainly helping commodities today," said
Scott Shelton, energy broker and commodities specialist at ICAP (L:IAP)
in Durham, North Carolina.

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Global assets in 2015 http://link.reuters.com/dub25t
Currencies vs dollar http://link.reuters.com/tak27s
Commodities performance http://link.reuters.com/rac73w
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