U.S. Dollar Slides Against Majors

The U.S. dollar declined against its major rivals in the European session on Monday, as last week's soft economic data cooled expectations for a Fed rate hike in December.

Data from the Commerce Department showed that the housing starts fell 5.5 percent to a seasonally adjusted annual pace of 1.09 million units, the lowest since September 2016. The decline disappointed economists, who had expected housing starts to climb to a rate of 1.215 million.

The University of Michigan said its preliminary consumer sentiment for June fell to 94.5 from a revised 97.1 in May. The figure was the weakest since last November.

The CME Fed Watch tool is showing a possibility of less than 40 percent for a Fed rate hike in December.

The greenback was also weighed by risk-on mood in Europe, as French president Emmanuel Macron's party scored an overwhelming victory in the second round of parliamentary elections and Brexit talks got underway in Brussels.

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

The greenback declined to 0.9696 against the Swiss franc, its lowest since June 14. Continuation of the greenback's downtrend may see it challenging support around the 0.95 region.

The greenback pared gains to 110.92 against the yen, from an early high of 111.21. The next possible support for the greenback-yen pair is seen around the 110.00 region.

Data from the Ministry of Finance showed that Japan recorded a merchandise trade deficit of 203.367 billion yen in May.

That missed forecasts for a surplus of 43.3 billion yen following the 481.7 billion yen surplus in April.

The greenback slipped to a 4-day low of 1.1213 against the euro and a 5-day low of 1.2814 against the pound, compared to Friday's closing values of 1.1196 and 1.2776, respectively. If the greenback extends drop, 1.14 and 1.295 are likely seen as its next support levels against the euro and the pound, respectively.

The greenback retreated to 0.7615 against the aussie, from an early high of 0.7585. The greenback is likely to target 0.78 as the next support level.

The greenback reversed from an early high of 1.3252 against the loonie and eased back to 1.3220. The dollar had earlier set a 5-day low of 1.3209 in the Asian session. Next likely support level for the greenback is seen around the 1.30 level.

Looking ahead, at 8:00 am ET, New York Fed President William Dudley speaks at the North Country Chamber of Commerce, in Plattsburgh.

Deutsche Bundesbank President Jens Weidmann delivers speech at the Colloquium in memoriam Prof Dr Hans Tietmeyer in Frankfurt at 11:00 am ET.

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