FOREX-U.S. dollars down, but on track for the biggest annual gain ever since 2015

* U.S. dollar up 8% so far in 2022 * Euro set for 6% annual loss (Updates prices, adds analyst comment, FX table, adds WASHINGTON to dateline) By Hannah Lang and Elizabeth Howcroft WASHINGTON/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 shares rose earlier in the session due to a lift in Wall Street sentiment from Thursday’s data showing an increase in U.S. unemployment claims. This suggested that the Fed’s interest rates hikes were decreasing labor demand. The dollar index fell 0.308% due to lower liquidity at 103.650 on Monday. To curb inflation, the U.S. Federal Reserve increased rates by 425 basis point since March. As 2022 closes, the dollar is up around 8% against a basket currencies. It has seen its highest annual jump in seven year. But it has been unable to maintain these gains for the past few weeks as investors try to find signs of when the Fed’s rate hike cycle will end. Adam Button (chief currency analyst at ForexLive) said, “I think everyone’s struggling with the question whether the big problem for 2023 will be poor growth or stubborn inflation.” “If there is weak growth, then the U.S. will fall.” The U.S. Dollar will rise if it has high inflation,” he said. The euro rose 0.22% to $1.0684 on the day, and is on track for a 6% annual decline versus the dollar compared to last year’s 7% drop. The euro has been under pressure this year due to weak eurozone growth, war in Ukraine, and Fed’s hawkishness. Last week, the British pound rose 0.21% to $1.2077. This is a drop of 10.7% annually. The Australian dollar was 0.12% higher on the day at $0.679 but is on track for a 6.5% decline over the entire year. China’s offshore Yuan fell 0.91% to $6.9092 against the U.S. Dollar. It was expected to drop 8.6% annually, due to dollar strength and an economic slowdown in China. Surging infections, which could lead to more economic disruptions, have dampened optimism regarding China’s reopening. This comes after three years under strict COVID-19 controls. Nordea’s chief analyst Jan Von Gerich said that China’s reopening will “be a source for volatility.” “But when we get past that, when we really get to the really positive economic impact, I think it should boost risk appetite globally,” he said. At 131.820, the U.S. Dollar was at a loss of 0.91% to the Japanese yen. The Bank of Japan’s ultra-dovish stance led to the dollar’s 14.5% gain against the yen this year. This is the worst performance of the yen since 2013. The Bank of Japan’s unexpected decision to modify its bond yield control program led to the yen hitting a four-month high against U.S. dollars earlier in December. The Swiss Franc stood steady at 0.92250 against the dollar. Friday’s announcement by the Swiss National Bank indicated that the central bank increased the amount it sold of Swiss currency in the third quarter of 2022. This is a sign that the bank has moved from fighting inflation to stemming franc strength. Bitcoin dropped 1.13% to $16,405, more than 64% in 2022. ======================================================== Currency bid prices at 10:00AM (1500 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index 103.6500 103.9800 -0.31% 8.349% +104.1000 +103.4900 Euro/Dollar $1.0685 $1.0662 +0.23% -6.00% +$1.0700 +$1.0639 Dollar/Yen 131.8300 133.0300 -0.91% +14.51% +133.0900 +131.5050 Euro/Yen 140.90 141.81 -0.64% +8.12% +141.8900 +140.3700 Dollar/Swiss 0.9223 0.9228 -0.04% +1.12% +0.9250 +0.9200 Sterling/Dollar $1.2074 $1.2054 +0.20% -10.69% +$1.2107 +$1.2011 Dollar/Canadian 1.3543 1.3549 -0.04% +7.11% +1.3563 +1.3515 Aussie/Dollar $0.6785 $0.6777 +0.16% -6.62% +$0.6809 +$0.6752 Euro/Swiss 0.9854 0.9841 +0.13% -4.97% +0.9868 +0.9831 Euro/Sterling 0.8848 0.8841 +0.08% +5.33% +0.8876 +0.8823 NZ $0.6344 $0.6350 -0.02% -7.24% +$0.6372 +$0.6317 Dollar/Dollar Dollar/Norway 9.8385 9.8750 -0.41% +11.64% +9.9085 +9.8315 Euro/Norway 10.5177 10.5278 -0.10% +5.04% +10.5625 +10.4982 Dollar/Sweden 10.4042 10.4548 -0.28% +15.37% +10.4905 +10.3737 Euro/Sweden 11.1174 11.1490 -0.28% +8.63% +11.1675 +11.0773 (Reporting by Hannah Lang in Washington and Elizabeth Howcroft in London; Editing by Chizu Nomiyama and Matthew Lewis)