* Euro hits 3-1/2 week high vs dollar
* Bitcoin struggles to rise further after last week's selloff
* Commodities rally supports Canadian, Australian dollars (Updates market action, adds quote)
By Richard Leong
NEW YORK, Dec 27 (Reuters) - The U.S. dollar fell to a 3-1/2 week low against a basket of currencies on Wednesday as traders bet more major central banks will begin reducing monetary stimulus in 2018 because of faster global economic growth.
In the cryptocurrency arena, Bitcoin's rebound following its worst week since 2013 fizzled as it struggled to stay above $16,000 for a second day.
"The dollar has taken quite a beating against the majors in 2017," said Minh Trang, senior foreign currency trader at Silicon Valley Bank in Santa Clara, California.
In holiday-thinned trading, an index that tracks the greenback against six currencies was down more than 0.2 percent at 93.027 .DXY after slipping to 92.956, its lowest since Dec. 1 earlier.
The dollar index has fallen 9.0 percent this year, putting it on track for its steepest annual decline since 2003, when it dropped 14.7 percent.
Conversely, the euro would have its best year against the greenback since 2003. The single currency EUR= reached a 3-1/2 week high of $1.1904 on Wednesday, Reuters data showed.
The dollar weakened against the yen for a second straight year. It held steady on the day at 113.26 yen JPY= .
Traders have shifted their focus from last week's passage of the biggest U.S. tax overhaul in 30 years to central banks other than the U.S. Federal Reserve and whether they will reduce bond purchases or start raising interest rates next year, said Peter Chia, FX strategist for United Overseas Bank in Singapore.
Bitcoin, down 4.31 percent at $15,055.13 BTC=BTSP on the Luxembourg-based Bitstamp exchange, struggled to rebound further after last week's rout. The biggest and best-known digital currency briefly traded below $15,000.
"Some people were nervous about it getting above $16,000 and began dumping it," said Greg Adamsick, director of global futures and options at RCM Alternatives in Chicago.
Meanwhile, oil prices LCOc1 surged to 2-1/2 year highs on Tuesday on news of an explosion on a Libyan crude pipeline and voluntary OPEC-led supply cuts. Copper prices CMCU3 on Wednesday rocketed to a four-year peak. developments bolstered demand for the currencies of commodity exporting countries, with the Canadian dollar touching C$1.2627 CAD=D3 , its strongest level in three weeks.
The Australian dollar AUD=D3 rose 0.6 percent to $0.7773, its highest level in two months. ========================================================
Currency bid prices at 2:43 PM ET (1943 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Euro/Dollar
EUR=
$1.1896
$1.1858
+0.32%
+13.16%
+1.1910
+1.1856 Dollar/Yen
JPY=
113.2600
113.2200
+0.04%
-3.09%
+113.3700 +113.1500 Euro/Yen
EURJPY=
134.74
134.27
+0.35%
+9.42%
+134.9700 +134.2100 Dollar/Swiss
CHF=
0.9867
0.9889
-0.22%
-3.06%
+0.9904
+0.9861 Sterling/Dollar GBP=
1.3393
1.3372
+0.16%
+8.57%
+1.3429
+1.3369 Dollar/Canadian CAD=
1.2643
1.2688
-0.35%
-5.86%
+1.2695
+1.2627 Australian/Doll AUD=
0.7773
0.7727
+0.60%
+7.73%
+0.7778
+0.7724 ar
Euro/Swiss
EURCHF=
1.1739
1.1731
+0.07%
+9.54%
+1.1776
+1.1731 Euro/Sterling
EURGBP=
0.8881
0.8863
+0.20%
+4.26%
+0.8888
+0.8855 NZ/Dollar
NZD=
0.7066
0.7037
+0.41%
+1.80%
+0.7076
+0.7030 Dollar/Norway
NOK=
8.2663
8.3089
-0.51%
-4.29%
+8.3243
+8.2674 Euro/Norway
EURNOK=
9.8358
9.8548
-0.19%
+8.25%
+9.8859
+9.8376 Dollar/Sweden
SEK=
8.2681
8.3469
-0.62%
-9.22%
+8.3545
+8.2681 Euro/Sweden
EURSEK=
9.8360
9.8972
-0.62%
+2.67%
+9.9205
+9.8367
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Dollar Index v Euro
http://reut.rs/2BHqgH1 World FX rates in 2017
http://tmsnrt.rs/2egbfVh
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>