* Investors fear prolonged U.S. government shutdown
* Treasury's Mnuchin unsuccessfully tries to soothe markets
* Concerns over more rate increases hurts stocks, greenback (Updates prices)
NEW YORK, Dec 24 (Reuters) - The U.S. dollar slipped onMonday as concerns about a prolonged government shutdown andsharply lower equity markets reduced demand for the greenback.
U.S. President Donald Trump's budget director and chief ofstaff, Michael Mulvaney, said on Sunday the partial U.S.government shutdown could continue into January, when the newCongress convenes and Democrats take over the House ofRepresentatives.
U.S. Treasury Secretary Steven Mnuchin, meanwhile, said onSunday that he had held a series of phone conversations with theheads of the six largest U.S. banks in an apparent attempt tosoothe investors disconcerted by the declining stock market.
"The CEOs confirmed that they have ample liquidity availablefor lending," the Treasury Department said.
Mnuchin "also confirmed that they have not experienced anyclearance or margin issues and that the markets continue tofunction properly," the Department said.
The calls did nothing to reassure equity investors, who fledstocks for the relative safety of U.S. Treasuries and gold. TheDow Jones Industrial Average ended pre-holiday trading downnearly 3 percent and the S&P 500 finished the day 2.7 percentlower.
"Mnuchin attempted some damage control," Win Thin, globalhead of currency strategy at Brown Brothers Harriman, said in anote, adding that the move could backfire.
"Yes, markets have been worried about recession and Fedpolicy mistakes. Until this weekend, however, markets were notthat concerned about liquidity or clearance issues. And withmarkets on edge, the last thing they needed was another issue toworry about," Thin said.
The Treasury Department also said Mnuchin will convene acall on Monday with the president's Working Group on FinancialMarkets, which includes Washington's main stewards of the U.S.financial system and is sometimes referred to as the "PlungeProtection Team."
The dollar index against a basket of six other majorcurrencies .DXY dipped 0.46 percent to 96.511. It has fallenfrom a one-and-a-half-year high of 97.711 on Dec. 14.
The dollar has weakened since the Federal Reserve onWednesday adopted a less dovish outlook on further rate hikesthan many had hoped, raising concerns that the U.S. central bankwill keep raising rates into a weakening U.S. economy.
Mnuchin on Saturday countered news reports that Trump hadsuggested that Fed Chairman Jerome Powell be fired because ofthe Fed's continued interest rate hikes.
Trump on Monday renewed his criticism of the Fed, however,tweeting that the central bank was the "only problem" for theU.S. economy.
Trading volumes were thin on Monday with Japan closedand major global markets preparing to shut for the Christmasholiday on Tuesday.
Currency bid prices at 1:31PM (1831 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Session Euro/Dollar EUR= $1.1416$1.1367 +0.43% -4.83% +1.1438 +1.1353 Dollar/Yen JPY= 110.3100 111.2100 -0.81% -2.09% +111.1900 +110.2700 Euro/Yen EURJPY= 125.90 126.45 -0.43% -6.86% +126.7400 +125.9000 Dollar/Swiss CHF= 0.9874 0.9950 -0.76% +1.31% +0.9951 +0.9863 Sterling/Dollar GBP= 1.2709 1.2630 +0.63% -5.94% +1.2742 +1.2631 Dollar/Canadian CAD= 1.3605 1.3598 +0.05% +8.17% +1.3610 +1.3566 Australian/Doll AUD= 0.7053 0.7032 +0.30% -9.60% +0.7069 +0.7034 ar Euro/Swiss EURCHF= 1.1272 1.1310 -0.34% -3.57% +1.1344 +1.1272 Euro/Sterling EURGBP= 0.8982 0.9000 -0.20% +1.11% +0.9027 +0.8965 NZ NZD= 0.6723 0.6717 +0.09% -5.12% +0.6743 +0.6707 Dollar/Dollar Dollar/Norway NOK= 8.7450 8.7611 -0.18% +6.56% +8.7757 +8.7203 Euro/Norway EURNOK= 9.9839 9.9706 +0.13% +1.37% +10.0055 +9.9238 Dollar/Sweden SEK= 9.0441 9.0413 +0.42% +10.27% +9.0735 +9.0167 Euro/Sweden EURSEK= 10.3270 10.2838 +0.42% +4.96% +10.3480 +10.2639