The dollar tumbled sharply against the Aussie, falling past the 0.80-handle for the first time since October. The greenback also struggled versus the euro, slipping to 1.4168 and the sterling, falling just shy of the 1.62-level. Crude oil extended gains, edging up past the $66 per barrel level while US equity bourses were relatively unchanged on the session.

The economic reports released earlier in the session were mixed, with growth and manufacturing reports deteriorating while a key sentiment survey improved by better than estimates. The preliminary Q1 GDP revealed a larger than expected contraction in economic activity, posting a 5.7% decline compared with a 6.1% decline in the previous quarter. The core PCE prices held steady at 1.5%, while corporate profits reversed a steep 10.7% decline in the previous quarter to improve by 1.1%. The New York NAPM index improved in May to 361.6 from April at 356.0. Meanwhile, the Chicago PMI disappointed in May, falling to 34.9 and missing estimates for an improvement to 42.0 from 40.1 in April. The PMI employment component fell to 25.0 from 31.8, while new orders fell to 37.3 from 42.1.

On an upbeat note, the University of Michigan consumer sentiment survey beat forecasts for an improvement to 68.0 in May from 65.1 in April, with the final reading edging up to 68.7. The expectations component jumped to 69.4 versus 63.1 a month earlier, while the conditions index fell to 67.7 from 68.3.

Traders will look ahead to key economic reports due out next week, with US data consisting of PCE, manufacturing ISM, pending home sales, ADP private sector payrolls, durable goods orders, factory orders, and the May labor report. The May unemployment rate is expected to jump to 9.2% from 8.9% in April, while non-farm payrolls are seen shedding another 520k jobs compared with 539k jobs lost a month earlier.

Euro Buoyed above 1.41

The euro jumped higher against the dollar, firming toward the 1.4140-level. Data released from the Eurozone overnight saw an improvement in Germany's April retail sales report, posting a 0.8% decline from a 1.5% decline a year earlier and improved by 0.5% from a 1.0% fall in the previous month.

EURUSD will encounter resistance at 1.4150, followed by 1.42 and 1.4230. Subsequent ceilings are eyed at 1.4265, backed by 1.43 and 1.4340. Support starts at 1.41, followed by 1.4070 and 1.4040. Additional floors are eyed at 1.40, backed by 1.3960 and 1.39.