India, June 12 -- The U.S. dollar dropped against its major counterparts in the New York session on Thursday, as soft producer inflation data for May raised hopes of a rate cut by the Federal Reserve.

On a monthly basis, the producer price index ticked up 0.1% in May, falling short of expectations of a 0.2% rise.

The core PPI, which excludes food and energy, edged up 0.1% in May, below expectations of a 0.3% rise.

Producer prices rose 2.6% year-over-year in May, in line with forecasts.

Initial jobless claims remained unchanged at 248,000 in the week ended June 7, exceeding estimates of 242,000.

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The greenback fell to 3-1/2-year lows of 1.1631 against t...