Forex Pros – The U.S. dollar was down against most of its major counterparts on Monday, as trade remained subdued in the run up to the year’s end, after China unexpectedly increased interest rates over the weekend in an effort to curb inflation. On Saturday, the People’s Bank of China raised its benchmark deposit and lending rates by 25 basis points for the second time since mid-October. The widely expected move was aimed at curbing inflation, which surged to a 28-month high of 5.1% in November. Meanwhile, during European morning trade, the greenback was down against the euro, with EUR/USD climbing 0.33% to hit 1.3156. The greenback was also down against the pound, with GBP/USD easing up 0.05% to hit 1.5448. Earlier in the day, industry data showed that house prices in the U.K. fell for the sixth consecutive month in December Elsewhere, the U.S. dollar was down against the yen, but up against the Swiss franc, with USD/JPY sliding 0.03% to hit 82.85, while USD/CHF climbed 0.18% to hit 0.9629. Earlier Monday, official data showed that housing starts in Japan rose significantly more-than-expected in November, while a separate report said the country’s corporate services price index fell in line with expectations in November. Meanwhile, the greenback was down against its Australian, New Zealand and Canadian counterparts, with AUD/USD jumping 0.16% to hit 1.0033, NZD/USD adding 0.09% to hit 0.7477, and USD/CAD slumping 0.10% to hit 1.0064. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.27%. Investors expect trading to be quiet throughout the day, with markets in the U.K., Canada, New Zealand and Australia closed for holiday and many traders in the U.S. on year-end leave.

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