The U.S. dollar was lower against its major counterparts in the European session on Monday, as investors reduced bets over the pace of possible Fed tightening for this year following the release of weak U.S. data on Friday.

While the U.S. retail sales grew less-than-expected in April, core inflation fell short of market estimates, separate reports showed Friday. These weak data raised doubts about the number of possible rate hikes by the Fed this year.

According to CME Group's FedWatch tool, the probability of a 25 basis point hike in June had dropped to 73.8 percent from 83 percent after the data.

While speaking in Dublin on Friday, Chicago Fed President chief Charles Evans said that he is comfortable with just another rate hike this year, if inflation outlook remains uncertain.

Investors await NAHB housing market index due today, followed by industrial production, building permits and housing starts on Tuesday as well as weekly jobless claims on Thursday for more clues about the strength of the economy.

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

The greenback fell to a 6-day low of 0.9975 against the Swiss franc, 4-day low of 1.2940 against the pound and a weekly low of 1.0972 against the euro, from its early highs of 1.0019, 1.2880 and 1.0923, respectively. If the greenback extends decline, it may challenge support around 0.98 against the franc, 1.30 against the pound and 1.10 against the euro.

The greenback eased back to 113.40 against the yen, from an early high of 113.73. This may be compared to a weekly low of 113.12 set at the beginning of today's trading session. The next possible support for the greenback is seen around the 112.00 region.

Data from the Bank of Japan showed that Japan's producer prices rose 0.2 percent on month in April.

That was unchanged from the March reading, and it surpassed expectations for a decline of 0.1 percent.

The greenback slipped to 1.3613 against the loonie, its weakest since April 27. If the greenback-loonie pair extends decline, 1.35 is likely seen as its next support level.

The greenback that closed Friday's trading at 0.6854 against the kiwi and 0.7385 against the aussie fell to a 4-day low of 0.6915 and near a 2-week low of 0.7444, respectively. Continuation of the greenback's downtrend may see it challenging support around 0.72 against the kiwi and 0.76 against the aussie.

Looking ahead, Canada existing home sales for April, U.S. NAHB housing market index and New York Fed's empire manufacturing survey for May are set for release in the New York session.

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