* Fed statement lifts dollar
* Euro hit by Fed, Greece
* World stocks slips led by banks
By Jeremy Gaunt, European Investment Correspondent
LONDON, Dec 17 (Reuters) - The dollar hit a three-month high
against major currencies on Thursday following a slightly more
optimistic assessment about the U.S. economy from the Federal
Reserve.
World stocks fell more than 1 percent, with banks taking a
hit at the prospect of less liquidity pumping from the U.S.
central bank and others.
The Fed's policy-making committee left rates unchanged as
expected on Wednesday but reminded markets it will let most of
the special liquidity facilities, which have helped bolster the
U.S. banking system after last year's credit crisis, expire by
early next year. []
Prospects that this will bring tighter monetary policy
earlier than expected triggered an unwinding of short dollar
positions ahead of the new year.
The euro was also hurt by Standard & Poor's cutting Greece's
rating by one notch, to BBB-plus from A-minus, late on
Wednesday. It said austerity steps announced by Prime Minister
George Papandreou this week were unlikely to produce a
"sustainable" reduction in the public debt burden.
"The problem for the euro is the mix of the (Fed) statement
and the very strong concerns over Greece.... All the euro
crosses have suffered," said Roberto Mialich, FX strategist at
Unicredit in Milan.
The euro was down 1.3 percent against the dollar at $1.4348,
touching September lows <EUR=>.
The dollar rose more than 1 percent on the day <.DXY>.
Sterling lost 1.4 percent to $1.6102 <GBP=>.
STOCKS WOBBLE
World stocks fell with MSCI's all-country index down 1.1
percent <.MIWD00000PUS> and its emerging market component off
1.5 percent <.MSCIEF>.
In Europe, the FTSEurofirst 300 <> index was down 0.7
percent, having hit a one-month closing high on Wednesday.
The heavyweight banking sector took most points off the
index. BNP Paribas <BNPP.PA>, Banco Santander <SAN.MC>, Barclays
<BARC.L> and HSBC <HSBA.L> were among the big losers.
U.S. stock futures fell around 0.8 percent <SPc2>, pointing
to a weaker open on Wall Street later.
Equities have had a robust year, especially since March, but
are now becoming more volatile ahead of year-end and with large
questions pending about 2010.
"Markets are still trying to find a trend and establish
whether the improvement in the economy is due to stimulus
packages," said Justin Urquhart Stewart, investment director at
Seven Investment Management.
Earlier, Japan's Nikkei average <> ended down 0.1
percent, slipping from seven-week highs as investors pocketed
profits on a rally in big banks such as Mitsubishi UFJ Financial
Group <8306.T>.
German government bonds rallied as the downgrade of Greece's
rating undermined already shaky sentiment for riskier peripheral
euro zone debt.
The two-year Schatz yield <EU2YT=RR> fell 7 basis points to
1.158 percent, while the 10-year Bund yield <EU10YT=RR> slipped
to 3.144 percent.
(Additional reporting by Brian Gorman and Jessica Mortimer)
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge
Hub click on http://blogs.reuters.com/hedgehub)
