U.S. Dollar Edges Higher in Thin New-Year Trading

The U.S. dollar rose slightly in quiet holiday-thinned trading at the start of the new year, with subdued volumes keeping currency moves limited and broadly directionless as traders awaited the return of full market participation.

The closures across several major financial centers kept liquidity light, curbing volatility and tempering activity in the foreign-exchange market.

The U.S. Dollar Index inched 0.2% higher after finishing 2025 with steep losses, having come under pressure from expectations of Federal Reserve interest-rate cuts and easing inflation trends — factors that continue to weigh on the currency’s broader outlook.

Among major pairs, the Japanese yen weakened slightly, with USD/JPY edging up 0.1%. The euro slipped, with EUR/USD down 0.3%, while the British pound also retreated, with GBP/USD falling 0.2%.

The Australian dollar outperformed, with AUD/USD rising 0.4% to lead major currencies higher on the day.