The greenback rose broadly against major currencies on Tuesday after oil prices tumbled by $3.46 or 2.62% on signs that U.S. fuel consumption is dropping and an unexpected rise in U.S. new home sales in April, boosting expectations the economic slowdown is not as bad as feared.

The single currency started to decline on news French business confidence slumped to a 2-1/2-year low this month. An index of sentiment among 4,000 French manufacturers slid to 102 from 106 in April. German GfK index also fell unexpectedly from 5.6 to 4.9 (forecast was 5.8) in June. ECB Governing Council member Klaus Liebscher said recent data hints at lower euro zone growth this year and next, but it is too soon to say inflation has peaked. Euro tumbled from 1.5819 to 1.5692 on Tuesday.

U.S. consumer confidence tumbled unexpectedly from 62.8 in April to a 16-year low of 57.2 in May amid rising gasoline costs and falling home prices. At the same time, inflation expectations rose to an all-time high of 7.7%. U.S. new home sales rose 3.3% in April to a 526,000 annual rate after the downwardly revised decrease of 11.0% to 509,000 annual rate in March.

San Francisco Fed President Janet Yellen said market-based inflation expectations have risen recently but have not become unmoored and the Federal Reserve intends to keep it that way. Yellen said rate increases are still 'down the road'.

The greenback rose from 103.27 to 104.35 and from 1.0224 to 1.0348 against the Japanese yen and Swiss franc respectively. The British pound also weakened from 1.9847 to 1.9715 on dollar’s broad-based rebound. U.S. currency rose against the Canadian dollar from 0.9869 to 0.9950 as crude oil prices declined sharply. Australian dollar and New Zealand dollar retreated from 0.7637 to 0.9580 and from 0.7924 to 0.7860 respectively.

Wednesday will see the release of Japan’s retail sales, German import price index, eurozone current account and U.S. durable goods.