The dollar edged lower Monday but rebounded from a one-week low against most of its major rivals, as the Australia and U.K. markets remained closed in observance of the Boxing Day holiday.
The dollar, which “rallied from mid-October to early December, has been correcting ever since,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.
On Monday, the ICE U.S. Dollar Index DXY, +0.07% a measure of the dollar against a basket of major currencies, was down 0.02% to 97.96, after dropping as low as 97.87, its lowest level in more than a week.
Analysts attributed the drop to year-end profit-taking, along with the continuing euro rally which started in early December, when the European Central Bank announced an expansion of its monetary stimulus that fell short of the market’s expectations.
The U.S. currency fell against the euro EURUSD, +0.0091% which rose slightly Monday to $1.0969 from $1.0965 Thursday. Against the yen, the bloc’s single currency fell to ¥132.04 from ¥132.08.
Meanwhile, the Canadian dollar USDCAD, +0.1726% and the Russian ruble USDRUB, +0.6389% dropped, as oil prices pulled back from last week’s rally, weighing on the currencies of countries that are major exporters of the commodity.
The Canadian dollar fell to 71.91 cents, compared with 72.44 cents on Thursday afternoon, while the ruble traded at 72.21 to the dollar, down from 70.64 on Thursday.
The greenback USDJPY, +0.06% was at ¥120.36 after hitting as high as ¥120.55. That compares with ¥120.33 in the late afternoon on Friday in Tokyo.
“The dollar lacks clear direction,” with many other overseas markets still being closed, said a Japanese brokerage house analyst. “But the dollar was not falling as was previously feared.”
“Given a lack of fresh trading cues about the U.S. economic fundamentals, it’s hard to assume a further dollar selling,” the analyst said.
