The dollar drifted sideways in thin year-end trade after sliding overnight against the euro and a basket of major currencies.

Analysts said light volume in post-holiday trade was exaggerating price movements, but some traders said the dollar was starting to look vulnerable again and the currency’s broad month-long rebound could be ending.

“Looking at the dollar’s overnight drop against the euro and the Swiss franc, the market looks to be losing power to buy the dollar back further,” said Minoru Shioiri, chief manager of forex trading at Mitsubishi UFJ Securities.

“The market may stay calm for now without fresh factors to trade on, but it may react once any major dollar-negative news pops up,” Shioiri said.

The euro edged down from late US trade on Wednesday at $1.4475, off a two-week high of $1.4506 hit overnight on electronic trading platform EBS.

The dollar index, which tracks the value of the greenback against six major currencies, was up a tad at 77.245, below a 2-month high of 77.854 hit last week.

The dollar was flat against the yen at 114.25 yen, just below a seven-week high of 114.49 yen hit on Monday.

Currency traders had shrugged off Wednesday’s data showing US home prices in October posted their biggest annual drop in the history of the S&P/Case-Shiller index.

While the data was two months old, it stirred concern among investors who expect the dollar to resume a broad slide in 2008 as credit worries resurface and signs of a US slowdown increase.

Investors may now focus on other economic data due this week.  A report on durable goods orders for November is due on Thursday, and a reading on new US home sales for November will be released on Friday.Reuters