The greenback relinquished some of its previous session's gains against the majors, easing to 1.3640 versus the euro and 1.5226 against the pound. US equities recovered slightly from yesterday's dip, with the Nasdaq climbing by nearly 2% and the S&P 500 up by over 1.3%.

Weekly jobless claims edged higher, rising to 637k from the previous week at 601k. Meanwhile, April PPI edged up more than expected to 0.3% reversing a 1.2% decline in the previous month. The April core PPI increased by 0.1% from a flat reading in the previous month while easing to 3.4% versus 3.8% a year earlier.

Traders will look ahead to Friday's data, which consists of the May NY Fed manufacturing survey, April CPI, April industrial production, March TIC flows and the May University of Michigan consumer confidence survey. The May NY Fed manufacturing survey is forecasted to improve to -12.5 from -14.65 in April. Industrial production in April is estimated to post a 0.7% decline in April versus a 1.5% fall in the previous month. The April headline consumer price index is seen posting a flat reading from a 0.1% decline a month prior, while the annualized figure is estimated to decline by 0.4%. The core readings of CPI are estimated to hold steady, up 0.2% m/m and up 1.8% y/y.

Euro Recovers

The euro climbed back above the 1.36-handle against the dollar, edging up to 1.3664. Eurozone economic reports released overnight revealed further deterioration with the March industrial production posted a 2.0% monthly decline and a 20.2% decline versus the previous year. In the coming session, the calendar includes Germany's Q1 GDP, Eurozone Q1 GDP and April Eurozone inflation. Germany's economy is seen declining by 3% on a quarterly basis and by 5% on an annualized basis in the first quarter. The Eurozone is estimated to post a 2.0% q/q decline in GDP, while the annualized growth rate is seen contracting sharply in Q1, down by 4%.

EURUSD holds steady at 1.3650 followed by 1.3670 and 1.37. Additional gains will target 1.3740, backed by 1.3760 and 1.38. On the downside, support begins at 1.3630, followed by 1.36 and 1.3550. Subsequent floors begin at 1.3520, backed by 1.35 and 1.3470.