The U.S. dollar weakened against its major counterparts in the New York session on Monday, as investors awaited central bank decisions and comments from Federal Reserve officials for clues about the central bank's likely monetary policy moves.

On Sunday, Minneapolis Fed President Neel Kashkari said that it's a "reasonable prediction" that the U.S. central bank will cut interest rates once this year, waiting until December to do so.

While Federal Reserve officials forecast just one interest rate cut this year following last Wednesday's monetary policy meeting, traders remain hopeful the predictions will turn out to be overly conservative if inflation continues to slow in the coming months.

Reports on retail sales and industrial production, due this week, are likely to provide some clues about interest rates.

In economic releases, the Federal Reserve Bank of New York's report showed New York manufacturing activity contracted at a notably slower rate in the month of June.

The New York Fed said its general business conditions index climbed to a negative 6.0 in June from a negative 15.6 in May, although a negative reading still indicates contraction. Economists had expected the index to rise to a negative 9.0.

Despite the continued contraction in current activity, the New York Fed said optimism about the six-month outlook picked up to its highest level in more than two years.

The greenback fell to 1.0737 against the euro and 1.2709 against the pound, from its early highs of 1.0686 and 1.2658, respectively. The currency is seen finding support around 1.10 against the euro and 1.31 against the pound.

The greenback eased to 0.8897 against the franc. This may be compared to a previous 10-day low of 0.8890. On the downside, 0.87 is likely seen as its next support level.

The greenback touched 1.3721 against the loonie, setting a 4-day low. The greenback is likely to face support around the 1.34 region, if it falls again.

The greenback retreated to 0.6616 against the aussie and 0.6134 against the kiwi, off its early 1-week highs of 0.6585 and 0.6104, respectively. The currency may locate support around 0.69 against the aussie and 0.63 against the kiwi.

The greenback was down against the yen, at 157.70. The greenback is poised to challenge support around the 146.00 level.

Grafico Cross US Dollar vs CAD (FX:USDCAD)

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Grafico Cross US Dollar vs CAD (FX:USDCAD)

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