* Dollar hits 2-month low vs yen
* U.S., most European markets to close Friday
* Higher oil prices help commodity-linked currencies
(Updates market action, changes dateline; previous LONDON)
By Richard Leong
NEW YORK, Dec 24 (Reuters) - The dollar fell against a
basket of currencies on Thursday, putting it on track for its
steepest monthly loss since April, as traders resumed booking
profits on their bullish bets on the greenback following the
U.S. interest rate hike last week.
A bounce in oil prices from 11-year lows supported the
Canadian dollar, Norwegian crown and other commodity-linked
currencies.
Trading volumes were a fraction of daily averages, with
skeletal staffs at bank trading desks in London and New York
ahead of Christmas. U.S. and European financial markets will be
closed on Friday. HOLIDAY
Despite this week's decline, most analysts remain upbeat on
the dollar's longer-term advance as the Federal Reserve is
expected to continue to raise rates, possibly four times in
2016. Their forecast gain for the dollar is far smaller than a
year ago, and there is less consensus on which currencies it can
gain against.
"The Fed is on track to raise rates in 2016, which will be
critical for the dollar," said Shaun Osborne, chief currency
strategist at Scotia Capital in Toronto.
Last week, the U.S. central bank raised rates for the first
time in nearly a decade, lifting the target range of its policy
rate by a quarter point to 0.25-0.50 percent.
Since the hike, the dollar has weakened against major
currencies as traders reduced their long positions on the
greenback, analysts said.
The dollar index .DXY , which gauges the greenback's value
against a group of six currencies, was 0.4 percent lower at
97.945, putting it on track for a weekly loss of 0.76 percent.
On the month, it has fallen 2.2 percent, which would be biggest
drop since April.
The dollar hit a near two-month low against the yen. It was
last down 0.5 percent at 120.28 yen JPY= .
The euro rose 0.4 percent against the dollar to $1.0958
EUR= , but dipped 0.1 percent to 131.81 yen EURJPY= .
A rebound in oil prices from 11-year lows boosted the
currencies of oil exporters such as Canada and Norway. O/R
The Canadian dollar CAD=D3 edged up 0.1 percent at
C$1.3836, while the Norwegian crown climbed 0.7 percent to 8.659
crowns per U.S. dollar NOK= .
The Australian and New Zealand dollars AUD= NZD= also
got a boost following a brutal late-year sell-off of oil and
other commodities. They were up around half a percent at $0.7275
and $0.6832, respectively.
Sterling GBP=D3 was up 0.4 percent at $1.4927 after
British data showed banks approved 20 percent more mortgages in
November than a year ago.