SINGAPORE, Dec 28 Reuters The dollar nursed steep losses on Thursday and was headed for a yearly decline, while the Swiss franc perched at a nineyear peak and the euro at a fivemonth high on expectations that 2024 will bring deep rate cuts.

With the year coming to a close, thin liquidity and limited moves are expected until the New Year.

The dollar index , which measures the U.S. currency against six rivals, fell to a fresh fivemonth low of 100.76. The index is on course for a 2.6 decline this year, snapping two straight years of strong gains.

Investor focus remains on the timing of the interest rate cuts from the Federal Reserve, with markets pricing in a 88 chance of a cut in March 2024, according to CME FedWatch tool. Futures imply more than 150 basis points of Fed easing next year.

Some analysts though remain unconvinced the U.S. central bank would be so aggressive.

We still believe that a March policy change toward easing is much too early and there is quite a bit of potential for a dollar rally if and when such action does not materialize, Monex USA analysts said in a note.

While the Fed took an unexpectedly dovish stance in its December meeting, opening the door to rate cuts next year, other major central banks, including European Central Bank retained their stance of needing to keep rates higher for longer.

Markets though are still pricing in as much as 165 basis points of rate cuts from the ECB next year.

The European and UK economies are in a much…