U.S. dollar up 8.4 so far in 2022
Euro set for 6.2 annual loss

LONDON, Dec 30 Reuters The dollar fell on Friday but was still on track for its biggest annual gain since 2015, in the last trading day of a year dominated by Federal Reserve rate hikes and fears of a sharp slowdown in global growth.

Asian equities had risen earlier in the session after market sentiment on Wall Street got a boost on Thursday from data showing rising U.S. jobless claims, which suggested the Fed39;s interest rate hikes were lowering demand for labour.

With liquidity lower due to holidays, the dollar index was down around 0.3 on the day at 103.720 .

The U.S. Federal Reserve has raised rates by a total of 425 basis points since March in an attempt to curb surging inflation.

Against a basket of currencies, the dollar has gained around 8.4 so far in 2022  its biggest annual jump in seven years but it has pared some gains in recent weeks as investors expect the Fed39;s ratehiking cycle to end next year.

Were not yet convinced that the Fed is turning dovish or that the U.S. inflation will come to target for good, so theres room for the dollar to rebound, said Jan Von Gerich, chief analyst at Nordea.

But for the nearterm outlook were looking for some more performance in the euro versus the dollar.

The euro was up 0.2 on the day at 1.0681 , on track for a 6.2 annual loss versus the dollar, compared to last year39;s 7 drop. A combination of weak eurozone growth, the war in Ukraine, and the…