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Analysts said it was unlikely for there to be any big moves in
the dollar until at least after Friday's closely watched
non-farm payrolls report, and perhaps not until next week's U.S.
Federal Reserve policy meeting is out of the way.
Bitcoin's moves dwarfed any traditional currency's once again,
with the cryptocurrency hitting a new record high of more than
$12,500 <BTC=BTSP>, up almost 7 percent on the day. It is on
track for its strongest quarter since 2013 after almost tripling
in price since the start of October.
The dollar index, which tracks the greenback against a basket of
six major currencies, inched 0.1 percent lower to 93.297 <.DXY=>.
It hit a five-day low of 111.99 yen <JPY=EBS>, down half a
percent on the day.
The United States' Republican-controlled House of
Representatives voted on Monday to go to conference with the
Senate to begin formal negotiations on a tax reform bill, with
the Senate expected to hold a similar conference vote later this
week - a development seen as positive by markets.
But in the meantime, the possibility of a U.S. government
shutdown looms, if lawmakers fail to reach a budget accord this
week. Government funding is set to expire on Friday.
"As we know, in general they (U.S. Congress) find a solution,
even if it's a last-day solution," said Commerzbank currency
strategist Esther Reichelt.
"But ... in general political turmoil is an underlying weight on
the dollar and it's one of the reasons the euro is above the
$1.18 level at the moment."
The euro was steady on the day at $1.1820 <EUR=>.
Expectations of higher U.S. rates underpinned the dollar, though
a flattening U.S. Treasury yield curve kept investors' hopes in
check.
Fed funds futures prices show investors expect the U.S. central
bank to hike rates at next week's meeting, with futures prices
showing a zero percent chance of rates remaining at their
current level of 1.00-1.25 percent.
The Australian dollar slipped 0.4 percent to $0.7580 <AUD=D4>,
within sight of its five-month low of $0.7532 plumbed on Nov.
21, after weak growth data.
The Canadian dollar edged down 0.1 percent to C$1.2699 against
its U.S. counterpart ahead of a Bank of Canada policy meeting
later in the day.
"The BoC should leave rates unchanged and the main question is
whether it offers any hints with respect to the January
meeting," wrote Credit Agricole analysts in a note to clients.
"If the BoC is seriously considering (another) hike, it could
offer a hint by referring to some evidence of building
underlying price pressures. Market-implied odds are at 40
percent for January at the moment, so it would take at least
some upgrade to the statement to push them above 50 percent."
(Reporting by Jemima Kelly, editing by David Evans)
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