* Dollar index hits 3-yr low, euro hits 17-mth high
* Euro may head toward $1.50, Aussie $1.10
* But euro faces resistance at $1.49, more ahead of $1.50
* Euro, others lifted by cen. banks diversifying out of dlrs
By Jessica Mortimer
LONDON, April 28 (Reuters) - The dollar slid to a three-year low against a basket of currencies on Thursday, with the euro set to attack $1.50, as expectations of prolonged ultra-loose monetary policy in the U.S. spurred more dollar selling.
The dollar dropped across the board, with the Australian dollar charging through previous highs to a 29-year peak above $1.0900 and looking poised to break $1.10 while both the euro and sterling vaulted to 17-month highs.
Traders and analysts said Asian central banks diversifying dollar proceeds into euros and other currencies was a major factor in the dollar's falls after earlier talk of dollar-buying intervention by several Asian central banks.
Trade calmed a little, however, as the euro stalled ahead of resistance at $1.4900. Traders cited heavy offers from $1.4880 up to $1.4900, as well as a reported options barrier at $1.4900.
The Federal Reserve said on Wednesday it would complete its $600 billion bond-buying programme in June but Chairman Ben Bernanke signalled no rush to tighten monetary policy with the jobs market still in a "very, very deep hole".
"It's all one way across the board, everyone seems to be betting on a weaker dollar and it seems a pretty safe bet," said Niels Christensen, currency strategist at Nordea in Copenhagen.
"The market is taking on board the more dovish element of the statement and the fact there is no indication of an early rate hike." He added it was "not a bold forecast" to expect the euro to hit $1.50 in the next week or two.
The dollar index, which measures the dollar's value against a basket of currencies, slid to a three-year low of 72.871, and last stood at 73.010, down 0.7 percent on the day.
The euro hit a 17-month high of $1.4882 on trading platform EBS after breaching resistance around $1.4850, the upper part of an uptrend channel since mid-February.
It was last up 0.5 percent at $1.4851, with technical resistance seen at the Dec. 7 peak of $1.4905. Above $1.4900, traders reported more offers at $1.4930 up to $1.4950, where another options barrier was reported.
"The euro is going up because it is the prime reserve alternative to the dollar," said Neil Mellor, currency strategist at Bank of New York Mellon.
LOOSE U.S. POLICY
A Reuters poll on Wednesday showed most U.S. primary dealers expect the Fed to keep interest rates near zero until the end of 2011. By contrast the European Central Bank has already raised and the Bank of England are seen likely to raise interest rates later this year.
The dollar index has slid nearly 4 percent this month, bringing it closer to a record low of 70.698 hit in March 2008.
The higher-yielding Australian dollar scaled a fresh 29-year high of $1.0948 and was last up 0.6 percent at $1.0932, while sterling hit a 17-month peak of $1.6747, and was last up 0.35 percent at $1.6684.
"It's clear that the dollar selling has been given a green light and we have the Asian central banks intervening... So that suggests further upside for the euro and Aussie," said Rob Ryan, FX strategist at BNP Paribas in Singapore.
The dollar was down 0.6 percent at 81.74 yen, with options expiries reported at 81.50 and 82.00 yen.
The yen showed little reaction after the Bank of Japan kept monetary policy steady on Thursday, as expected. (Additional reporting by Masayuki Kitano in Singapore; Editing by Toby Chopra)