U.S. dollar losses deepened on Monday, with traders chalking up the currency's broad decline to a combination of firmer risk appetite, year-end positioning and some concerns about strained U.S. finances.

The euro rose 1 percent to $1.3363 while higher oil prices and China's decision to hold off on interest rate hikes to fight inflation boosted the Australian dollar 0.9 percent to $0.9944. The dollar fell 0.4 percent to 83.59 yen.

Traders also said percolating worries about the U.S. deficit following a deal to extend Bush-era tax cuts for all earners was also weighing, pointing to the dollar's 1.2 percent decline to 0.9686 Swiss francs, a typical safe haven.

U.S. Treasury debt yields began rising after the tax cut deal was struck, with the benchmark 10-year note yield hitting a six-month high, though key support levels have held on Monday. Higher yields led to dollar gains last week, burnishing its appeal relative to other currencies.

(Reporting by Steven C. Johnson; Editing by James Dalgleish)