The dollar come off its multi-year high but is expected to remain firmer in 2015 as strong U.S. data had prompted market participants to bring forward their expectations for the first rate hike. In this environment, the two-year U.S. yield, which has already hit a level that was not seen in almost four years, still has scope to increase further. So the buy-the-dollar trend is expected to spill over into the New Year; the prospect of further easing in Japan and the euro-zone reinforces this view.EUR/USD saw a sharp rise in the Asian session, hitting 1.2201. Since many traders are on vacation, the pair will continue to remain subdued until fresh liquidity enters the market in the New Year. In the meanwhile, the key risk event for the pair is the third round of Greece's presidential election.USD/JPY touched 120.16 in Asia trading before rebounding to 120.29. Japanese data on Friday showed that CPI has further slowed in November, increasing pressure on the BOJ to ease policy further. Expectations for more BOJ easing will increase downside pressure on the yen in 2015.Both AUD/USD and NZD/USD saw modest gains on Monday. Since the dollar is expected to remain stronger in the next year, commodity currencies will remain on the back foot.
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