U.S. Dollar Falls On U.S. Policy Worries

The U.S. dollar declined against its major counterparts in the Asian session on Tuesday, as failure in the passage of the Republican healthcare bill in the Senate raised doubts over the future of U.S. tax reforms.

Republican Senators Jerry Moran and Mike Lee joined Senators Susan Collins and Rand Paul in opposing the legislation to dismantle and replace the Affordable Care Act on Monday, lacking sufficient votes to pass.

The latest setback has been a major political blow to Trump administration, triggering concerns about the President's ability to deliver tax reforms.

The greenback has been already weighed by lowering hopes for a Fed rate hike later this year, following dovish comments from Fed Chair Janet Yellen as well as weak U.S. inflation and retail sales data released last week.

Risk sentiment faded on caution ahead of BOJ and ECB meetings due this week.

No big changes are expected from the European Central Bank and the Bank of Japan when they meet to review their monetary policies on Thursday.

The greenback showed mixed performance in the Asian session. While the currency dropped against the franc and the euro, it held steady against the yen. Against the pound, it rose.

The greenback fell to more than a 14-month low of 1.1538 against the euro and more than a 2-week low of 0.9588 versus the franc, compared to Monday's closing values of 1.1478 and 0.9624, respectively. The next possible support for the greenback is seen around 1.17 against the euro and 0.93 against the franc.

The greenback dropped to 111.99 against the Japanese yen, its lowest since June 30. Continuation of the greenback's downtrend may see it challenging support around the 110.00 area.

Reversing from an early high of 1.3050 against the pound, the greenback edged down to 1.3105. The pair finished Monday's trading at 1.3053. The greenback is seen finding support around the 1.345 region.

Pulling away from an early 4-day high of 1.2701 against the loonie, the greenback weakened to 1.2636. The greenback is seen finding support around the 1.25 mark.

The greenback slid to more than a 2-year low of 0.7924 versus the aussie, off its prior 4-day high of 0.7786. Continuation of the greenback's downtrend may see it challenging support around the 0.81 region.

The greenback hit a session's low of 0.7361 versus the kiwi, from a 5-day high of 0.7261 hit at 6:45 pm ET. The greenback is poised to target support around the 0.75 level.

Looking ahead, U.K. consumer, producer and retail price indexes for June and house price index for May and Germany ZEW economic sentiment index for July are due to be released in the European session.

In the New York session, U.S. import price index for June and U.S. NAHB housing market index for July are slated for release.

At 9:30 am ET, Bank of England Governor Mark Carney is expected to speak at the unveil of the new £10 note, in Hampshire.