Investing.com - The U.S. dollar edged slightly lower against the other major currencies on Monday, with activity likely to stay subdued as many global markets remained closed for the Christmas holiday.
U.S. and European stock markets are closed on Monday to make up for Christmas Day falling on a Sunday, resulting in muted trading volumes.
Against the yen, the dollar was down 0.25% at 117.05 by 4:10AM ET (09:10GMT), retreating from a 10-1/2 month high of 118.65 set last week.
Meanwhile, the euro was little changed against the greenback at 1.0450, rebounding from last week's 13-year low of 1.0352, as investors took profits ahead of the end of the year.
Elsewhere, the British pound was steady at around 1.2280 against the dollar, compared with a seven-week low of 1.2229 touched on Friday, amid renewed uncertainty over the process by which Britain will leave the European Union.
The greenback remained well-supported thanks to bets of higher U.S. growth and a faster pace of interest rate increases under incoming president Donald Trump.
Since the U.S. election in early November, the dollar index has rallied by almost 6%.
The Federal Reserve hiked interest rates for the first time in a year earlier this month and projected three more increases in 2017. In contrast, central banks in Europe and Japan remain committed to very loose monetary policies
Higher rates boost the dollar by making the currency more attractive to yield-seeking investors.
In the week ahead, trading volumes are expected to remain light due to the Christmas holiday and as many traders already closed books before the end of the year, reducing liquidity in the market and increasing the volatility.
The U.S. is to release reports on consumer confidence, pending home sales and jobless claims, as traders look for further indications on the strength of the economy and hints on the future path of monetary policy.
Elsewhere, Japanese inflation data will also be in focus as investors assess the need for further stimulus in the world's third's largest economy.