The U.S. dollar moved lower against its major trading partners in the European session on Tuesday, after a slew of speeches from Fed officials confirmed that easy policy would remain on hold, helping ease fears about policy tightening.

Fed officials talked down inflation risks overnight and repeated that the current price pressures are transitory.

Fed officials Lael Brainard, Raphael Bostic and James Bullard suggested that supply bottlenecks could lead to higher prices in coming months but the spike should be temporary.

Treasury yields fell on the Fed comments. The yield on the benchmark 10-year treasury note fell to 1.591 percent.

Investors await U.S. personal consumption data, the Fed's preferred inflation measure, due later this week for policy clues.

The greenback touched a 4-day low of 1.4211 against the pound and more than a 3-month low of 0.8930 against the franc, down from its early highs of 1.4147 and 0.8971, respectively. The greenback is likely to find support around 1.45 against the pound and 0.87 against the franc.

The greenback pulled back from its prior highs of 108.86 against the yen and 1.2211 against the euro and depreciated to near a 2-week low of 108.56 and a 4-1/2-month low of 1.2262, respectively. On the downside, 106.00 and 1.24 are possibly seen as its next support levels against the yen and the euro, respectively.

The greenback weakened to a 6-day low of 0.7240 against the kiwi, 4-day lows of 1.2030 against the loonie and 0.7776 against the aussie, after rising to 0.7203, 1.2056 and 0.7746, respectively in early deals. If the greenback falls further, 0.74, 1.18 and 0.81 are likely seen as its next possible support levels against the kiwi, the loonie and the aussie, respectively.

The euro rose on risk appetite, as investors scaled back expectations over a Fed rate hike.

Survey data from the ifo Institute showed that German business sentiment improved more than expected in May.

The business confidence index rose to 99.2 in May from 96.6 in the previous month. The reading was also above economists' forecast of 98.2.

The euro spiked higher to more than a 3-year high of 133.52 against the yen and a 4-day high of 1.4770 against the loonie, off its previous lows of 132.73 and 1.4702, respectively. Next key resistance for the euro is seen around 139.00 against the yen and 1.51 against the loonie.

Reversing from an early low of 0.8619 versus the pound, the euro edged higher to 0.8619. The euro may test resistance around the 0.88 level, if it rises again.

The euro rose back to 1.0964 against the franc, not far from a 4-day peak of 1.0968 set at 2:45 am ET. The euro is poised to find resistance around the 1.10 region.

The euro rebounded from its prior 4-day lows of 1.5740 against the aussie and 1.6905 against the kiwi and was trading at 1.5796 and 1.6969, respectively. The currency is seen finding resistance around 1.61 against the aussie and 1.72 against the kiwi.

Looking ahead, U.S. consumer confidence index for May, new home sales for April and FHFA's house price index and S&P/Case-Shiller home price index for March will be out in the New York session.

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