The dollar was steady in holiday-thinned trading on Tuesday, shrugging off upbeat Japanese economic data as most market participants have already closed their books for the year.
Markets in Australia and Hong Kong remained closed after Monday’s Christmas holiday, and many financial centres in Europe will also be shut on Tuesday.
The euro was steady at $1.1871. The single currency gave up some ground last week after Catalan separatists won a regional election, deepening Spain’s political crisis in a sharp rebuke to Prime Minister Mariano Rajoy and European Union leaders who backed him.
Against the yen, the dollar was almost flat on the day at 113.29.
“Yesterday and today, major markets are closed, so it's difficult to see clear direction at the moment, and we need to think about what will happen in the beginning of next year," said Masafumi Yamamoto, chief currency strategist for Mizuho Securities in Tokyo. “I still believe that the passage of the US tax bill and the avoidance of the government shutdown are positive for the dollar,” he said. “In a relative sense, the dollar has an advantage.”
Last week, the US Congress approved a tax code overhaul that was expected to give at least a short-term lift to already solid economic growth. They also pushed through a measure to fund the federal government through January 19, averting agency shutdowns.
The market had a muted reaction to data released early on Tuesday which showed that Japan's core consumer prices rose for the eleventh straight month, up 0.9 per cent year-on-year, and household spending jumped in November.
While the inflation rate remains distant from the Bank of Japan's 2 per cent target, the rise offered some hope that a steady economic recovery will gradually drive up prices. Still, the BOJ kept monetary policy steady last week and its governor reassured markets the central bank will lag well behind overseas peers in ending its ultra-easy policies.
Minutes of the BOJ's October meeting, released on Tuesday, showed most members shared the view that the central bank should maintain its easy policy.
The dollar index, which tracks the greenback against a basket of six major rivals, edged down 0.1 per cent to 93.253. Cryptocurrency bitcoin was last up 1.7 per cent at $14,142.33 on the Bitstamp exchange.