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Dollar moves slightly higher in subdued trade

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Investing.com -

Investing.com - The dollar moved slightly higher against the other major currencies in subdued trade on Monday, as demand for the greenback remained supported by the Federal Reserve's most recent policy move.

Trading volumes were expected to remain limited ahead of the Christmas Holiday.

EUR/USD slipped 0.12% to 1.0852.

The dollar rallied last week after the Fed hiked interest rates by a quarter of a percentage point to a range between 0.25% and 0.5% in a widely expected move.

Commenting on the decision, Fed Chair Janet Yellen said the FOMC will not be mechanical in its approach to normalize monetary policy and that future rate hikes would be gradual and data dependent.

Separately, markets remained jittery after crude oil prices fell to 34.29$ on Friday, the lowest level since 2004, amid renewed worries over a global supply glut.

USD/JPY edged up 0.19% to 121.38.

The yen remained under pressure after the Bank of Japan on Friday kept its main monetary stimulus target unchanged at ¥80 trillion Friday, but decided to extend the maturity of the Japanese government bonds it purchases from 10 to 12 years and set up a ¥300 billion fund to buy exchange-traded funds.

The yen initially strengthened following the announcement, but quickly moved lower as analysts said that the BoJ's easing move was minor and did not amount to a significant change to its stimulus.

Elsewhere, the dollar was steady against the pound, with GBP/USD at 1.4889 and was higher against the Swiss franc, with USD/CHF up 0.46% at 0.9967.

The Australian dollar was weaker, with AUD/USD down 0.31% at 0.7164, while NZD/USD rose 0.31% to 0.6748.

Meanwhile, USD/CAD declined 0.23% to trade at 1.3927, still close to Friday's more than 11-year high of 1.4000.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.10% at 98.83.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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