The index has gained 4.3 percent since the November 8 US presidential election on expectations that US President-elect Donald Trump's plan to boost fiscal stimulus would benefit the currency. The Federal Reserve's projections on December 14 of three rate hikes for 2017 instead of the two foreseen in September have also contributed. Several analysts have said the dollar's uptrend remains intact next year, but they have not ruled out the risk of declines in the greenback, given their doubts surrounding how much dollar appreciation a Trump White House will tolerate.
"Much depends on how the Trump presidency and the Chinese economy work out," said Marshall Gittler, chief market analyst for retail broker FX Primus. "In general, I expect the dollar to continue to gain." The dollar index was last off 0.62 percent at 102.040, down from a 14-year high of 103.65 hit on December 20. The dollar was up 0.21 percent against the yen at 116.77 yen, but was set to post its first yearly loss in five years against the Japanese currency, of about 3 percent.
Sterling, which has lost more than 16 percent of its value against the dollar to mark its worst year since 2008 on worries over Britain's June 24 "Brexit" vote to leave the European Union, was last up 0.82 percent at $1.2368. The euro was up 0.67 percent against the dollar at $1.0561, though down nearly a full cent from its session high. Other big losers this year against the dollar have been the Mexican peso and the Chinese yuan, which have lost 20.2 percent and 6.9 percent, respectively.