* Bit to keep US govt open stokes anti-dollar mood
* Euro hold below 3-year peak versus greenback
* Evidence of reserve diversification drags on dollar
(Updates market action, changes dateline, previous LONDON)
By Richard Leong
NEW YORK, Jan 18 (Reuters) - The U.S. dollar fell on Thursday as traders piled into the euro, yen, sterling and other major currencies amid concerns over a possible U.S. government shutdown as lawmakers struggled to cobble together a federal budget deal.
If an agreement to fund government operations, even a temporary one, is not reached by the Friday deadline, it would compound an already-negative climate for the greenback, analysts said.
"Politics are sabotaging economics," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York. "It's the uncertainty about the U.S. budget deal. We are going to see further pressure on the dollar if there isn't a deal."
Republican lawmakers are scrambling to pass a temporary measure to keep the government open. A House vote on the funding extension is expected after 2:30 p.m. (1930 GMT). At 10:53 a.m. (1553 GMT), the dollar index was down 0.36 percent at 90.590. It held above a three-year low of 90.104 touched on Wednesday.
The euro hovered below its three-year peak against the greenback. It was up 0.43 percent at $1.2236.
The dollar was down 0.22 percent at 111.03 yen, while the pound was up 0.35 percent at $1.3874.
The greenback reversed gains from late Wednesday after Apple Inc. said it would make about $38 billion in one-time tax payments on its overseas cash holdings, though analysts expect the impact on currency markets is going to be limited. RESERVE DIVERSIFICATION
The dollar has fallen since 2017 largely on expectations central banks besides the Federal Reserve are seeking to end the extraordinary measures they adopted to combat the 2008 global financial crisis and the recession that follwed.
Another factor analysts are attributing to the greenback's weakness is that global investors, including sovereign wealth funds and central banks, are looking to diversify their dollar holdings into other currencies.
China and Japan, the two largest foreign U.S. creditors, cut their Treasuries holdings in November. An analysis of the quarterly data published by the International Monetary Fund of the currency composition of the world's foreign exchange reserves held by global central banks showed that reserve managers were increasing the pace of adding non-dollar based currencies to their reserves. BNY Mellon strategists said the increase in holdings of pounds and euros in global central banks' reserves over the three quarters ending September 2017 came at the expense of reduced allocation into U.S. dollars. ========================================================
Currency bid prices at 10:51AM (1551 GMT)DescriptionRIC Last U.S. ClosePct Change YTD Pct High BidLow Bid
Previous Change
Session Euro/DollarEUR=$1.2236$1.2184 +0.43% +2.00%+1.2265 +1.2166Dollar/Yen JPY=110.9900 111.2800-0.26% -1.49%+111.4800 +110.8300Euro/Yen EURJPY= 135.85 135.60+0.18% +0.50%+136.3000 +135.4800Dollar/Swiss CHF=0.9597 0.9654-0.59% -1.50%+0.9666 +0.9579Sterling/DollarGBP=1.3875 1.3825+0.36% +2.69%+1.3890 +1.3806Dollar/CanadianCAD=1.2481 1.2434+0.38% -0.76%+1.2484 +1.2428Australian/DollAUD=0.7986 0.7969+0.21% +2.37%+0.8005 +0.7942ar Euro/Swiss EURCHF= 1.1745 1.1765-0.17% +0.48%+1.1775 +1.1734Euro/SterlingEURGBP= 0.8818 0.8810+0.09% -0.73%+0.8837 +0.8809NZ NZD=0.7301 0.7271+0.41% +3.03%+0.7320 +0.7247Dollar/DollarDollar/NorwayNOK=7.8287 7.8766-0.61% -4.61%+7.8932 +7.8218Euro/NorwayEURNOK= 9.5823 9.6033-0.22% -2.70%+9.6209 +9.5805Dollar/SwedenSEK=8.0245 8.0482+0.10% -2.16%+8.0619 +8.0143Euro/SwedenEURSEK= 9.8204 9.8104+0.10% -0.19%+9.8394 +9.8068
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Erosion of Dollar's Top Reserve Currency Status U.S. Treasuries top foreign holders EURUSD and real yields World FX rates in 2017 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>(Additional reporting by Saikat Chatterjee in London; Editing by Bernadette Baum)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.