U.S. Dollar Weakens After Soft Retail Sales Data

The U.S. dollar dropped against its major counterparts in the New York session on Tuesday, as the nation's retail sales increased less than expected in May, fuelling hopes of a rate cut this year.

Data from the Commerce Department showed that retail sales crept up by 0.1 percent in May after dipping by a revised 0.2 percent in April.

Economists had expected retail sales to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.

Excluding an increase in sales by motor vehicle and parts dealers, retail sales edged down by 0.1 percent in May after slipping by a revised 0.1 percent in April.

Economists had expected ex-auto sales to climb by 0.2 percent, matching the increase originally reported for the previous month.

New York Fed President John Williams said that interest rates are likely to "come down gradually over the next couple of years" as inflation cools.

The greenback fell to a 3-month low of 0.8826 against the franc and a 4-day low of 1.2720 against the pound, off its early highs of 0.8900 and 1.2668, respectively. The currency is seen finding support around 0.87 against the franc and 1.31 against the pound.

The greenback declined to 5-day lows of 1.0761 against the euro and 0.6656 against the aussie, from its early highs of 1.0709 and 0.6600, respectively. The currency may locate support around 1.10 against the euro and 0.69 against the aussie.

The greenback eased to 157.62 against yen, from an early 4-day high of 158.23. On the downside, 147.00 is likely seen as its next support level.

The greenback fell back to a 6-day low of 1.3709 against the loonie. The greenback is likely to face support around the 1.34 region, if it falls again.

The greenback touched a 4-day low of 0.6147 against the kiwi, down from an early nearly 3-week high of 0.6097. The greenback is poised to challenge support around the 0.63 level.