The U.S. dollar depreciated against its major counterparts in the European session on Monday, as hopes for a Fed rate cut returned back following the U.S. decision to hike tariffs on Chinese goods last week.

Market participants renewed bets for a quarter-point rate cut by December, after U.S. President Donald Trump raised tariffs on US imports from China.

The Fed's short-term rates are currently in a range of 2.25 percent to 2.5 percent.

Speaking in Mississippi, Atlanta Fed President Raphael Bostic said Friday that he could not rule out whether the new tariffs could trigger a rate cut.

"Depending on the severity of the response, it could," Bostic told.

"It really depends. It depends on what businesses decide to do and then it depends on how long the tariffs are in place."

Today's economic calendar is quiet, with investors awaiting speeches from FOMC members Rosengren and Clarida in Boston.

Key economic data for the week include retail sales, import and export prices, manufacturing production and building permits for April.

The currency traded mixed against its major counterparts in the Asian session. While it fell against the franc and the yen, it held steady against the euro and the pound.

The greenback declined to 1.0079 against the Swiss franc, its lowest since April 17. If the greenback extends fall, 0.99 is likely seen as its next support level.

Having climbed to 1.1223 against the euro at 3:45 am ET, the greenback reversed direction with the pair trading at 1.1242. The greenback is seen finding support around the 1.14 region.

The greenback edged down to 109.59 against the yen, from a high of 109.84 hit at 5:30 pm ET. The next possible support for the greenback is seen around the 107.00 level.

Preliminary data from the Cabinet Office showed that Japan's leading index reached its lowest level since mid-2016.

The leading index, which measures the future economic activity, declined to 96.3 in March from 97.1 in February. The score matched economists' expectations.

The greenback reversed from an early high of 1.2998 against the pound, falling to 1.3028. The currency is poised to target support around the 1.32 mark.

The greenback slightly eased to 0.6986 against the aussie and 0.6592 against the kiwi, from its early 4-day highs of 0.6968 and 0.6573,respectively. On the downside, 0.715 and 0.68 are likely seen as the next support levels for the greenback against the aussie and the kiwi, respectively.

The greenback pulled back to 1.3421 against the loonie, off its early high of 1.3445. The greenback is likely to test support around the 1.32 region.

In today's events, Federal Reserve Governor Richard Clarida will deliver a speech at an event hosted by the Federal Reserve Bank of Boston at 9:05 am ET.

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