SINGAPORE, Dec 26 Reuters The dollar was trying to find a floor on Tuesday in holidaythinned trade, pressured by signs that inflation in the world39;s largest economy is cooling which will likely give the Federal Reserve room to ease interest rates next year.

The yen meanwhile steadied near its recent fivemonth peak on the view that the Bank of Japan BOJ could soon mark an end to its ultraeasy policy. For most of 2022 and 2023, the policy has kept the Japanese currency under pressure as other major central banks embarked on aggressive ratehike cycles.

Currency moves were largely muted in the day after Christmas, as markets in the UK, Australia, New Zealand and Hong Kong, among others, were still out for a public holiday.

Against the greenback, the New Zealand dollar scaled a fresh fivemonth peak of 0.6325, while the Australian dollar was similarly huddled near its recent fivemonth top and last bought 0.6817.

The euro edged 0.03 higher to 1.1024, not too far from a fivemonth top of 1.1040 hit last week, while sterling was little changed at 1.2706.

Data released on Friday showed U.S. prices fell in November from the previous month for the first time in more than 312 years and the annual increase in inflation slipped further below 3, boosting market expectations of an interest rate cut from the Fed next March.

The reading came a week after Fed policymakers opened the door to rate cuts in 2024 at the central bank39;s final policy meeting for the year, a move that drove…