Investing.com - The dollar remained close to 12-year highs against the other major currencies on Monday, as trading volumes were seen to be thin throughout the session with U.S. markets closed for a national holiday.
EUR/USD gained 0.53% to 1.1628, pulling away from Friday's 11-year lows of 1.1459.
The euro remained under pressure amid mounting expectations that the European Central Bank will launch a government bond-buying program at its meeting on Thursday, in a bid to stave off the threat of deflation in the euro area.
An interim ruling last Wednesday, which is likely to be accepted by the European Court of Justice, said the ECB was free to pursue a bond purchasing program without legal challenge.
Last Thursday, the Swiss National Bank abandoned its three-year old 1.20 per euro exchange rate cap in a shock move, signaling that it expects the ECB to act this week.
The dollar and the euro continued to strenghten against the Swiss franc, after plummeting to multi-year lows last Thursday. USD/CHF rallied 1.84% to 0.8758, while EUR/CHF jumped 2.48% to trade at 1.0195.
Earlier Monday, official data showed that Swiss producer price inflation fell 0.4% last month, compared to expectations for a 0.6% decline, after a 0.7% drop in November.
The dollar held steady against the yen, with USD/JPY at 117.51, while GBP/USD edged up 0.09% to 1.5163.
The safe haven yen remained supported on Monday as last week’s market volatility meant that investors remained risk adverse.
The commodity-linked currencies were steady to lower. AUD/USD slipped 0.16% to 0.8215 even as the Australian Bureau of Statistics reported earlier that new motor vehicle sales increased by 3.0% in December, after a 0.6% fall the previous month.
Meanwhile, NZD/USD fell 0.22% to 0.7777 and USD/CAD was almost unchanged at 1.1984, not far from Friday's more than five-year high of 1.2046.
In Canada, official data on Monday showed that foreign securities purchases slowed to C$4.29 billion in November from C$9.53 billion the previous month. Analysts had expected foreign securities purchases to fall to C$7.23 billion in November.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.30% to 92.77, still close to Friday's 12-year highs of 93.56.