* U.S. GDP rises 2.6 pct, boosts dollar * U.S. data does not alter path of Fed policy-analyst * Graphic: World FX rates in 2019: tmsnrt.rs/2egbfVh (Updates prices, adds comment, details) By Gertrude Chavez-Dreyfuss NEW YORK, Feb 28 (Reuters) - The dollar rose to a 10-week high against the yen and reduced losses versus the euro on Thursday, after U.S. data showed that growth in the world's largest economy was stronger than expected in the fourth quarter. Prior to the data, the dollar index, a measure of the greenback's value against six major currencies, had fallen to a three-week trough. According to the Commerce Department report, U.S. gross domestic product increased at a 2.6 percent annualized rate in the fourth quarter after expanding at a 3.4 percent pace in the July-September period. Economists had been expecting growth of just 2.3 percent. The economy overall grew 2.9 percent in 2018, the best performance since 2015, and better than the 2.2 percent in 2017. "For now, this points to upwards risks for the dollar, as market pricing for further rate hikes is very cautious at less than one interest rate hike in 2019," said Bart Hordijk, market analyst at Monex Europe in Amsterdam. In midday trading, the dollar index was up slightly at 96.201 recovering from a three-week low. Traders said some of its weakness was caused by month-end selling after a strong month for risky assets. Against the yen, the dollar rose 0.4 percent to 111.38 yen , turning positive after the U.S. GDP data, and hitting 111.43 yen, the highest in roughly 10 weeks. Eric Viloria, FX strategist at Credit Agricole in New York, said the GDP report does not change the trajectory of Federal Reserve policy. "Our economists have been forecasting one more U.S. (interest rate) hike this year, so there's no real change to that. The GDP data is not a really surprise to the Fed," he added. The euro, meanwhile, was up 0.1 percent at $1.1379, paring gains that took it to a three-week high. Core European bond yields hit a three-week high on Wednesday while a broad indicator of European economic data ticked higher, rising from an eight-month low hit last month, suggesting the near-term economic outlook may be improving. Latest positioning data showed speculators have been ramping up negative bets on the euro since December to a near two-year high on concerns European policymakers won't raise interest rates this year. The safe-haven Swiss franc, meanwhile, rallied against the dollar, which fell 0.4 percent to 0.9973 franc, after weak Chinese factory data and after talks between U.S. President Donald Trump and North Korean leader Kim Jong Un at their second nuclear summit collapsed unexpectedly. The franc tends to rally in times of geopolitical tension. Trump said no deal was reached because Kim wanted all sanctions lifted in exchange for partial denuclearization. In China, meanwhile, factory activity reached a three-year low in February as export orders fell at the fastest pace since the global financial crisis, more evidence of an economy facing weak demand at home and abroad. ======================================================== Currency bid prices at 12:46 PM (1746 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1376 $1.1369 +0.06% -0.81% +1.1420 +1.1359 Dollar/Yen JPY= 111.3600 110.9800 +0.34% +1.00% +111.4300 +110.6600 Euro/Yen EURJPY= 126.69 126.19 +0.40% +0.37% +126.9000 +125.9000 Dollar/Swiss CHF= 0.9974 1.0014 -0.40% +1.63% +1.0017 +0.9927 Sterling/Dollar GBP= 1.3258 1.3308 -0.38% +3.93% +1.3324 +1.3254 Dollar/Canadian CAD= 1.3155 1.3154 +0.01% -3.53% +1.3207 +1.3141 Australian/Doll AUD= 0.7093 0.7138 -0.63% +0.60% +0.7166 +0.7091 ar Euro/Swiss EURCHF= 1.1348 1.1385 -0.32% +0.84% +1.1388 +1.1330 Euro/Sterling EURGBP= 0.8578 0.8542 +0.42% -4.52% +0.8586 +0.8538 NZ NZD= 0.6803 0.6845 -0.61% +1.30% +0.6854 +0.6797 Dollar/Dollar Dollar/Norway NOK= 8.5497 8.5460 +0.04% -1.03% +8.5648 +8.5154 Euro/Norway EURNOK= 9.7266 9.7184 +0.08% -1.81% +9.7402 +9.7200 Dollar/Sweden SEK= 9.2312 9.2708 -0.36% +2.98% +9.2757 +9.1691 Euro/Sweden EURSEK= 10.5035 10.5410 -0.36% +2.33% +10.5580 +10.4660 (Reporting by Gertrude Chavez-Dreyfuss; additional reporting by Saikat Chatterjee in London; editing by Jonathan Oatis)
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