The dollar fell against 16 other major currencies amid sluggish trading on Tuesday as currency exchange markets got off to a slow start after the holiday season.

The euro was valued at $1.3272 from $1.3201 while sterling rose from $1.9613 to $1.92729 and the yen slipped slightly from ¥118.90 to ¥118.85 on the dollar.

"The real money players globally have not come back from the holidays yet," Bank of New York strategist Michael Woolfolk told Reuters.

"We'll start to see some real flows tomorrow, Thursday and Friday. We're dollar negative today, but I don't think that's any leading indicator for the rest of the week."

January 2nd is a public holiday in Japan, while US markets remained closed to mark the funeral of former president Gerald Ford.

Speculation that the US Federal Reserve will cut rates soon also depressed trading as analysts awaited the release of notes from its last meeting, due to be released today.