(New throughout, updates prices and market actdivity)
* Dollar index gains about 3.7 pct for year
* Euro briefly surges about two full cents vs dollar
* Dollar gains more than 16 pct vs sterling in 2016
* Dollar on track for first yearly loss in five vs yen
By Sam Forgione
NEW YORK, Dec 30 (Reuters) - The U.S. dollar slipped on Friday but notched its fourth straight year of gains against a basket of major currencies.
The dollar index .DXY , which measures the greenback against a basket of six major rivals, gained about 3.7 percent for the year.
The index rose about 7.1 percent during the fourth quarter, more than half that gain coming since the Nov. 8 U.S. presidential election on expectations that U.S. President-elect Donald Trump's plan to boost fiscal stimulus would benefit the currency. A faster projected pace of rate hikes from the Federal Reserve next year also contributed.
Several analysts have said the dollar's uptrend remains intact next year, but noted the risk of dollar weakness given doubts surrounding how much dollar appreciation a Trump White House will tolerate.
"Much depends on how the Trump presidency and the Chinese economy work out," said Marshall Gittler, chief market analyst for retail broker FX Primus.
For the day, the dollar index was last off 0.38 percent at 102.290, down from a 14-year high of 103.65 hit on Dec. 20, and was up 0.18 percent against the yen at 116.74 yen JPY= . The greenback was still set to post its first yearly loss in five against the Japanese currency, of about 2.9 percent.
Sterling, which fell roughly 16.2 percent against the dollar to mark its worst year since 2008 on worries over Britain's June 24 "Brexit" vote to leave the European Union, was last up 0.62 percent GBP=D4 at $1.2340.
Sterling bore the brunt of concerns this year over Britain's trade policy with Europe which flared up following the Brexit vote, said Jason Leinwand, founder and chief executive of FirstLine FX in Randolph, New Jersey.
The euro was up 0.39 percent against the dollar at $1.0529, but was set to fall 3 percent for the year to notch its third straight yearly loss.
The dollar posted sizable gains this year against the Mexican peso MXN= and the Chinese yuan CNY=CFXS of 20.6 percent and 7 percent, respectively. peso suffered from Trump's proposals to build a border wall and rewrite trade agreements with Mexico, while the yuan has been pressured by worries about slowing Chinese economic growth.
For more on the dollar's performance in the fourth quarter and 2016, click: GRAPHIC: World FX rates in 2016
http://tmsnrt.rs/2egbfVh GRAPHIC-Emerging market currencies vs. dollar
http://reut.rs/1jYWYtJ
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