The dollar struggled to find a bottom in holiday-thinned trade on Tuesday, as the Federal Reserve cut interest rates next year due to dropping inflation in the world’s largest economy.

The yen held near its five-month high, with the New Zealand dollar reaching a five-month high of $0.6325 against the greenback.

The euro rose 0.03% to $1.1024, while sterling held steady at $1.2706. The dollar fell a week after Fed officials signaled rate reduction in 2024 during the central bank’s final policy meeting.

The Asian yen’s 0.1% rise to 142.25 per dollar was supported by BOJ Governor Kazuo Ueda’s comments.

The Chinese yuan fell versus the dollar due to the People’s Bank of China’s (PBOC) monetary policy dropping deposit interest rates for the third time this year.