* Dollar steadies vs euro, yen after boost from higher U.S.
yields
* Canadian, Australian dollars trim gains as oil rebound
fizzles
(Updates throughout)
By Shinichi Saoshiro
TOKYO, Dec 30 (Reuters) - The dollar held steady against a
basket of currencies on Wednesday following a rise in U.S. debt
yields, while the Canadian and Australian dollars trimmed gains
after a rebound in crude oil prices fizzled.
The dollar index .DXY stood at 98.196, not far from a
one-week peak of 98.413 touched on Tuesday. The index was on
track for an 11 percent gain this year.
The euro was almost flat at $1.0932 EUR= after slipping
0.4 percent overnight. A weak five-year auction and bounce in
oil prices pushed U.S. Treasury yields higher on Tuesday,
favouring the greenback.
Oil prices jumped on Tuesday as cold weather in parts of the
northern hemisphere encouraged buyers. But on Wednesday, U.S.
crude CLc1 handed back some of the previous day's 3 percent
gain and dipped back towards a 7-year low, hurt by lingering
supply glut concerns and forecasts that the cold snap would be
short-lived. O/R
The dollar is generally expected to gain against peers such
as the euro and yen in 2016 on expectations that U.S. monetary
policy will diverge further from those in the euro zone and
Japan, with the Federal Reserve poised to raise interest rates
further next year after tightening for the first time in nearly
a decade this month.
But crude oil instability, made worse by prospects of a warm
global winter, was seen clouding the dollar's near-term outlook.
"The yen is basically expected to weaken on U.S.-Japanese
yield differentials. But it will be exposed to volatility until
U.S. economic growth looks assured, and we could see even wider
swings in case of a warm winter," wrote Junichi Makino, chief
economist at SMBC Nikko Securities in Tokyo.
"Thus a clear yen-weakening trend may not be established
until the spring."
The dollar was steady at 120.49 yen JPY= , moving within a
tight 120.63-120.17 range so far this week. The U.S. currency
rose to 123.59 after the Fed's rate hike this month but has
since lost momentum.
The Canadian dollar weakened a touch to C$1.3851 CAD=D4
against the dollar from an overnight close of C$1.3843, when it
had rallied from C$1.3941 on the bounce in oil.
The loonie hit an 11-year low of C$1.4003 to the dollar
earlier this month, dogged by weak prices of oil, Canada's main
export, and the dollar's relative strength against other
currencies.
The Australian dollar slipped 0.2 percent to $0.7280
AUD=D4 after rising to $0.7303 overnight, its highest since
Dec. 10. The New Zealand dollar was down 0.2 percent at $0.6860
NZD=D4 .
The Chinese yuan in the spot market traded at 6.4902 per
dollar CNY=CFXS , in proximity of a 4-1/2-year low of 6.4948
hit on Tuesday.
The dollar has gained about 4.6 percent versus the yuan so
far in 2015. The yuan tumbled after devaluation by the People's
Bank of China in August and has retreated since, guided steadily
lower by a succession of weakly set official midpoints.
(Editing by Richard Borsuk and Jacqueline Wong)