The US dollar continues to decline as traders weigh the prospects of a Fed rate cut before the release of non-farm payroll data.

The dollar fell against all major currencies as investors increase their bets on a rate cut by the Federal Reserve following new signs of weakness in the US economy. The Bloomberg Dollar Index fell for a fourth consecutive trading day as Asian investors evaluate how the weak retail data released on Tuesday will support further rate cuts by the Fed. In addition, concerns among investors about the US non-farm data on Wednesday and inflation data on Friday have further strengthened reasons to reduce their positions in the US dollar. "The relative interest rate narrative has once again become the market focus, with weak US economic data leading investors to expect an increased likelihood of further rate cuts by the Fed," said David Forrester, strategist at French Agricultural Credit Bank in Singapore. Data released by the US Department of Commerce on Tuesday showed that retail sales unexpectedly stalled in December, suggesting that consumer momentum provided for economic growth at the end of the year has weakened.