TOKYO: The dollar remained caged in recent ranges against major rivals in thin trade on Tuesday, with the euro holding above an 11-month low in the final trading days of 2011.
The greenback often trades in volatile way against the yen during the last three business days of the year, strategists say but some believe this year might be an exception.
"The New Year's holidays this year are over the weekend, meaning that Japan's last trading day of the year lines up with everyone else's, so we might not see the last-minute activity when Japan is on holiday as in past years," said Koji Fukaya, chief currency analyst at Credit Suisse in Tokyo.
The dollar has wavered in a tiny band of around 2 yen since Oct. 31, when Japanese financial authorities intervened in foreign exchange markets to prevent the yen from strengthening further.
Against its Japanese counterpart, the dollar was nearly flat at 77.93 yen, compared to 77.99 yen in late Asian trading on Monday, when markets in London and New York were closed for holidays.
The euro was steady at $1.3067, holding above an 11-month low of $1.2945 hit this month, as well as its 2011 low of $1.2860.
Speculative positions as seen in the latest IMM data still favour the greenback, meaning the euro could get a short-covering boost, with stop-loss orders said to be placed around $1.3120.
Looking ahead, Italy will sell 3- and 10-year bonds on Thursday, and a successful auction could give the euro a lift.
The Aussie was down 0.2 percent at $1.0147. The dollar index stood at 79.87, nearly flat from 79.86 on Monday, and below an 11-month peak of 80.73 hit this month. But the index remained above support at 78.76, the top of its weekly Ichimoku cloud.
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