The dollar index, which measures the greenback against six major peers, decreased 0.24 percent to 102.4374 in late trading.
In late New York trading, the euro increased to 1.0874 U.S. dollars from 1.0854 dollars in the previous session, and the British pound was up to 1.2528 U.S. dollars from 1.2449 dollars in the previous session.
The U.S. dollar bought 136.0770 Japanese yen, higher than 135.6600 Japanese yen of the previous session. The U.S. dollar decreased to 0.8949 Swiss franc from 0.8979 Swiss franc, and it fell to 1.3469 Canadian dollars from 1.3561 Canadian dollars. The U.S. dollar fell to 10.3432 Swedish Krona from 10.3882 Swedish Krona.
The New York Federal Reserve reported Monday that the empire state manufacturing index dived to a negative 31.8 reading in May, lower than 10.8 in April. Economists had expected a reading of negative 2.0.
"Inflation is not going to come down very quickly. And in that regard, then, cutting rates doesn't really fit into that scenario," Raphael Bostic, president of Atlanta Federal Reserve, said on Monday.
Despite Bostic's relatively hawkish comments, the U.S. dollar index is losing ground as "traders take some profits off the table after the recent rally," said Vladimir Zernov, analyst with market information supplier FX Empire.
Improvement of overall risk sentiment also weighed on the U.S. dollar, according to Monex USA, a provider of foreign exchange, risk management, and international payment solutions.
The Eurostat reported Monday that the euro area industrial production in March declined by 4.1 percent month on month, lower than economists' expectation of a 2.5-percent fall.
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