Near-term dollar trends and underlying sentiment will inevitably be driven by the US employment report and the US currency should be resilient unless there is a very poor figure

The dollar broke Euro support levels near 1.55 and pushed to highs beyond 1.5430 after the US data releases. There was a further unwinding of short dollar positions while long commodity positions were also reduced and these trends tended to reinforce each other over the day.

The US PMI data continued the trend for major data releases over the past few days as it was weak, but slightly stronger than expected. The index for the manufacturing sector was unchanged in April at 48.6 and compared with expectations of a small monthly decline and did not provide any strong indication of recession.

Elsewhere, jobless claims increased to 380,000 in the latest week from a revised 345,000 previously which will maintain some concerns over the labour market ahead of the key Friday employment report.

Confidence in a Fed pause will be much higher if there is a respectable payroll figure on Friday and there will be a big boost to dollar confidence if there is any figure above the zero level.