The dollar has limped into 2018, slumping to a four-month low against a strengthening euro on Tuesday.
The move reflected the trend across 2017 that saw the U.S. currency slide almost 10 percent against a basket of its trading peers — the dollar's largest annual fall since 2004.
Giles Keating, managing director at the Werthstein Institute, told CNBC Tuesday that, against the euro in particular, the dollar may continue to lose value.
"In the U.S., three or four rate hikes is just not enough at a time when the ECB (European Central Bank) has said more or less definitely they are going to be terminating QE (quantitative easing) in September and even beginning to talk about rate rises," he said.
"So the ECB is getting more aggressive. The Federal Reserve, I think, is dragging its feet. No wonder the euro is going up."
The dollar has weakened against a wide range of assets. Keating said traders are testing the new line-up at the Fed on what its interest rate policy will be.
"We are going to change three of the most important people on the FOMC (Federal Open Market Committee) this year. Really, the markets are saying to the newcomers, 'Are you going to be tough enough or not?'" he said.
The euro rose 1.1 percent in the last week of 2017, bringing it back within sight of a two-and-a-half year peak of $1.209 set in September.