USD traded flat against other major currencies in the European session on Wednesday amid thin trading as many markets stayed closed due to Christmas festivities.
The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, slipped 0.08% from the previous close to 108.17.
As the year draws to a close, trading volumes have started to reduce, with investors primarily focused on the Federal Reserve’s rate outlook.
Following Fed chairman Jerome Powell’s signals at the U.S. central bank’s final meeting this year that fewer rate cuts will come in 2025 given still-elevated inflation, markets have recalibrated their rate cut expectations and price growth projections for the world's biggest economy. According to Reuters, they now anticipate approximately 35 basis points of policy easing next year.