The greenback continued falling against the major currencies Monday amid expectations that foreign central banks would raise the cost of borrowing while the Federal Reserve is predicted to hold firm or cut again.

Dollars were trading for 117.3 Japanese yen, down from 117.62 yen in the prior session. Euros were selling for $1.4228, up from $1.4178 late Friday. The British pound was buying $2.042, up from $2.034 previously.

"The dollar remains out of favor with expectations that the European Central Bank and other central banks will be raising interest rates," says Michael Woolfolk, senior currency strategist at Bank of New York Mellon. That will make returns from holding dollars less attractive relative to owning assets denominated in higher yielding currencies.

Woolfolk also says there has been something of a resumption of the so-called carry trade, whereby traders sell the Japanese yen and use the funds to invest in other currencies.

"The yen seems to be in a race with the dollar for the bottom of the league tables among the major currencies," he says.

Notably the dollar and the yen have both fallen relative to the euro over the past month, with the yen depreciating faster than the greenback.

"We are seeing the return of risk tolerance, which has led investors to take out even more yen loans to invest in higher yielding currencies, as well as commodities," he adds.

Elsewhere in the foreign-exchange market, the Canadian dollar was down relative to last week, but still trading near record levels against the U.S. currency.

One U.S. dollar would buy 97.5 Canadian cents, up from 97.3 cents late Friday.

The PowerShares DB G10 Currency Harvest ( DBV), which seeks to benefit from differences between the interest rate yields of the various major currencies, was falling 0.8% in recent action.

The CurrencyShares Japanese Yen Trust ( FXY), which tracks the value of the Japanese currency, was ahead by 0.2%. The CurrencyShares Canadian Dollar Trust ( FXC) was down 0.3%, while the CurrencyShares Euro Trust ( FXE) was up less than 0.1%.