FOREX-Dollar broadly firm; global growth fears support

* Dollar index up 0.2 percent at 76.898 .DXY

* Fears on global economy supporting dollar

(Changes dateline, byline, updates prices, adds quotes)

By Simon Falush

LONDON, Aug 20 (Reuters) - The dollar held near a 2008 high set the previous session against a basket of major currencies on Wednesday, as investor bearishness on the global economic outlook prompted a view that rates outside the U.S. may be cut.

Dollar gains were limited however by higher oil and continued worry on the U.S. financial and housing sectors.

The slowing growth outlook in major economies outside the U.S. has supported the dollar as investors begin to price in rate cuts in economies with high yields, while the U.S. is seen as having ended its easing cycle.

This view was bolstered by data on Tuesday showing that U.S. wholesale prices rose at the fastest annual rate in 27 years and by two policy makers saying the Federal Reserve must be ready to take action if slowing economic growth fails to curb inflation.

Richard Fisher, president of the Dallas Fed, and Jeffrey Lacker of the Richmond Fed warned that vigilance on price pressures is necessary even as oil prices have come off their peaks.

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However U.S. home building projects fell 11 percent to their lowest annual rate in more than 17 years, highlighting the frailty of the U.S. economy.

The dollar's dramatic rise, which has seen the euro fall more than 12 cents from its record peak last month, has stalled as investors are uncertain about whether the uptrend can be sustained in the context of a slowing U.S. economy.

"Investors are anxious about whether the major move represents lasting dollar strength or is just a major correction at a time when liquidity is poorest in July and August and moves are exaggerated," said Teis Knuthsen, head of FX research at Danske Markets in Copenhagen.

At 0809 GMT, the euro had fallen 0.2 percent to $1.4755 <EUR=>, but held well above a six-month low of $1.4628 hit on Tuesday according to Reuters data.  Continued...