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U.S. Dollar Drops Amid Risk Appetite

The U.S. dollar retreated from its early highs against its most major rivals in early European deals on Tuesday, as waning concerns over North Korea and Hurricane Irma dampened demand for safe-haven assets.

Investors heaved a sigh of relief after Hurricane Irma was downgraded to a tropical storm and the damage from its impact was less than had been predicted.

The UN Security Council on Monday imposed new sanctions on North Korea, banning all textile exports and restrict shipments of oil products to Pyongyang.

However, these measures fell short of the stronger sanctions initially proposed by the U.S., which includes freezing the assets of North Korean leader Kim Jong-un and a complete ban on oil exports to the country.

With today's economic calendar being light, traders focus on the consumer price index and weekly jobless claims on Thursday as well as retail sales, industrial production and consumer sentiment on Friday for more clues about economy.

The greenback was higher against its major rivals in the Asian session.

Reversing from an early 5-day high of 1.1946 against the euro, the greenback dropped to 1.1978. If the greenback weakens further, 1.21 is possibly seen as its next support level.

The greenback weakened to 1.3210 against the pound, following a 4-day high of 1.3161 hit at 8:30 pm ET. The next possible support for the greenback is seen around the 1.34 mark.

The greenback retreated to 0.9547 against the Swiss franc, from a 5-day high of 0.9574 set at 1:15 am ET. On the downside, 0.94 is likely seen as the next support level for the greenback-franc pair.

The greenback dropped to 4-day lows of 1.2082 against the loonie and 0.7320 against the kiwi, off its early high of 1.2124 and a 5-day high of 0.7217, respectively. The greenback is seen finding support around 1.19 against the loonie and 0.76 against the kiwi.

On the flip side, the greenback rose to a weekly high of 109.60 against the Japanese yen, after having dropped to 109.24 at 6:00 pm ET. Continuation of the greenback's uptrend may see it challenging resistance around the 111.00 region.

Looking ahead, at 6:20 am ET, the Bank of England Executive Director Chris Salmon will give a speech at TradeTech FX Europe, Barcelona.

The European Central Bank Vice President Vitor Constancio speaks at a conference on monetary policy in Frankfurt at 9:45 am ET.

by RTTNews Staff Writer

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