* FOMC minutes boost the U.S. dollar

* Sterling under pressure as Brexit deal uncertainty looms

* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh

By Vatsal Srivastava

SINGAPORE, Oct 18 (Reuters) - The dollar traded stronger versus its major peers on Thursday after minutes from the U.S. Federal Reserve's September meeting affirmed expectations that the central bank is likely to continue raising interest rates this year.

Every Fed policymaker backed raising interest rates last month and also generally agreed borrowing costs were set to rise further.

Interest rate futures are now pricing in an 83 percent likelihood that the Fed raises rates in December, according to the CME Group's FedWatch Tool, the fourth hike this year. Two more increases are likely next year.

The dollar index, which measures its value against six major peers, traded at 95.664, up 0.1 percent on Thursday.

"The dollar is being bid as there is follow through support post the release of the FOMC minutes," said Ray Attrill, head of currency strategy at NAB.

"Dollar bulls are playing to the view that the market is under-pricing what the U.S. Fed can do," added Attrill.

U.S. benchmark 10-year treasury yields climbed to 3.2 percent on Thursday. The last time they traded below the psychologically important 3 percent level was Sept. 18.

The euro changed hands at $1.1501 on Thursday.

The British pound lost 0.12 percent versus the dollar on Thursday to $1.3096, weakening after European Union's chief Brexit negotiator Michel Barnier's comments on Wednesday that more time was needed to secure an exit deal for Britain.

The Canadian dollar changed hands at 1.3022. The dollar has gained 1.6 percent versus the loonie over the last twelve trading sessions.

The Japanese yen broke a four-day winning streak versus the dollar on Wednesday, as the greenback gained 0.65 percent versus the Japanese currency.

The yen changed hands at 112.65 to the dollar on Thursday. The dollar has gained 0.9 percent versus the yen since Monday, when the yen hit a one-month high of 111.61.

The Australian dollar, often considered a barometer of global risk appetite, changed hands at $0.7126 on Thursday, gaining 0.24 percent versus the greenback on the back of a strong unemployment report.

The Aussie hit a two-year low of $0.7039 on Oct. 5 and analysts still expect the currency to remain under pressure.

"The combination of a strengthening U.S. dollar and commodity price pressures could bring a test of the two-year low around $0.7040 in the coming sessions," said Sydney based Michael McCarthy, chief market strategist at CMC Markets.