The U.S. dollar depreciated against its major counterparts in the European session on Friday, as two of the Federal Reserve's most hawkish policymakers played down the possibility of a super-sized 100 basis point rate hike this month.

Federal Reserve Governor Christopher Waller and St. Louis Fed President James Bullard remarked on Thursday that they supported a 75 basis point rate hike at the upcoming meeting, instead of the 100 basis points predicted by some of the market participants.

The probability of a 100 basis point rate hike at the July meeting has receded to around 51 percent following the comments, according to CME Group's FedWatch Tool.

U.S. treasury yields fell, with the benchmark yield on the 10-year note touching 2.95 percent. Yields move inversely to bond prices.

Data from the Commerce Department showed that U.S. retail sales jumped more than expected in the month of June.

The Commerce Department said retail sales shot up by 1.0 percent in June after edging down by a revised 0.1 percent in May.

Economists had expected retail sales to increase by 0.8 percent compared to the 0.3 percent dip originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales still surged by 1.0 percent following a 0.6 percent increase in May. Ex-auto sales were expected to climb by 0.6 percent.

The greenback weakened to 138.51 against the yen and 1.3014 against the loonie, after rising to 139.13 and 1.3136, respectively in early deals. The currency is likely to face support around 121.00 against the yen and 1.26 against the loonie.

The greenback dropped to 2-day lows of 0.9770 against the franc and 1.0085 against the euro, down from its prior highs of 0.9841 and 1.0007, respectively. The greenback may locate support around 0.95 against the franc and 1.09 against the euro.

The greenback touched 4-day lows of 0.6806 against the aussie and 0.6177 against the kiwi, off its early highs of 0.6719 and 0.6112, respectively. The greenback is seen finding support around 0.70 against the aussie and 0.64 against the kiwi. The greenback was lower against the pound, at 1.1874. If the greenback slides further, 1.22 is possibly seen as its next support level.

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