U.S. Dollar Falls On Hopes For Global Recovery

The U.S. dollar lost ground against its most major counterparts in the European session on Tuesday, as gradual reopening of businesses worldwide after the coronavirus-incurred economic lockdowns bolstered sentiment.

While Spain decided to remove a two-week mandatory confinement for all travelers from overseas starting July, Greece reopened restaurants and cafes by imposing new social distancing rules and other health safety measures.

The Japanese government fully lifted the state of emergency on Monday and urged people to adapt to a "new normal".

U.K. Prime Minister Boris Johnson announced plans to reopen outdoor markets and car showrooms on June 1 and non-essential shops from mid-June.

The state of California lifted restrictions on houses of worship and mall, but personal services such as hair salons, nail salons and barbershops will remain closed.

News that US biotech firm Novavax had begun trials for an experimental coronavirus vaccine also supported sentiment.

Economic data on U.S. new home sales and consumer confidence are due out at 10:00 am ET. The USD/CHF pair was trading at 0.9658, setting a 5-day low. On the downside, 0.99 is likely seen as its next support level.

The greenback declined to 1.2343 against the pound, its lowest level since May 12. Against the euro, the greenback hit a 5-day low of 1.0980. If the dollar extends decline, 1.25 and 1.12 are likely seen as its next support levels against the pound and the euro, respectively.

The greenback fell to near a 3-month low of 0.6637 against the aussie, more than 2-month lows of 0.6196 against the kiwi and 1.3837 against the loonie, off its previous highs of 0.6538, 0.6294 and 1.3986, respectively. The greenback is likely to face support around 0.70 against the aussie, 0.64 against the kiwi and 1.33 against the loonie.

The greenback depreciated to a 2-day low of 107.40 against the yen, pulling away from a 6-day high of 107.92 seen at 9:30 pm ET. The greenback is seen finding support around the 106.5 region.

Governor Haruhiko Kuroda said that the Bank of Japan will not hesitate to take additional easing measures if required as the novel coronavirus, or Covid-19, depressed global activity.

Japan's economy has been in an increasingly severe situation due to the impact of the spread of Covid-19 at home and abroad, Kuroda said in a semi-annual testimony to parliament.

U.S. FHFA's house price index and S&P/Case-Shiller home price index for March, new home sales for April and consumer sentiment index for May are due out in the New York session.