Dollar Dips Amidst Tensions in the Middle East

The US dollar has hovered near multi-month lows against major currencies on Tuesday, as investors reassess the likelihood of imminent monetary tightening due to escalating tensions in the Middle East.

The euro traded at $1.1581 during early Asian trading, close to Monday's two-month high of $1.1614, while sterling maintained near its previous session's three-month peak at $1.3548.

Last week's US retail sales data fell for the first time in nine months, following unexpected job losses and mild inflation, prompting investors to reduce expectations of a rate hike by the Federal Reserve.

According to the CME FedWatch tool, traders now predict a 35% chance of a Fed rate increase in September, down from 52.2% last week.