The greenback was in the Thursday session, higher against the yen while slumping against the Australian dollar. Yesterday's FOMC policy statement propped up the dollar on improved sentiment over the economic outlook. The Fed expressed optimism that the US economic recession may be moderating. The calendar today saw better than expected US reports, with weekly jobless claims declining to 631k versus an upwardly revised 645k a month earlier and Chicago PMI jumping to 40.1 in April, up from 31.4 in March.

US data slated for release on Friday consists of April University of Michigan consumer confidence, March factory orders and April ISM manufacturing. The final reading for the University of Michigan consumer sentiment in April is estimated to stand pat at 61.9. Factory orders are expected to post a 0.6% decline versus a 1.8% increase a month earlier. Lastly, the April manufacturing ISM is seen improving to 38.4 from 36.3 in March while the prices paid component is expected to edge up to 34.0 from 31.0.

Euro Drifts Lower on Data

The euro reached a new two-week high against the greenback in early London trading at 1.3384 but quickly relinquished its strength follower weaker than anticipated labor reports.

Economic data from the Eurozone were largely worst than expected reinforcing sentiment that the region's fundamentals continue to deteriorate. Eurozone unemployment rate in March shot up to its highest level since November 2005 at 8.9% compared with an upwardly revised 8.7% reading in the previous month. However, inflation figures improved as the annualized consumer price index held steady at 0.6% in April. Germany's unemployment rate edged up in April to 8.3%, its highest level since December 2007 and up from 8.1% in March. Unemployment change fell to 58k compared with an upwardly revised 71k a month earlier.

EURUSD holds steady around 1.3250, with support starting at 1.32, followed by 1.3160. Additional support is seen at 1.3130, backed by 1.31 and 1.3050. On the upside, gains will target 1.3270, followed by 1.33 and 1.3340. Subsequent gains will emerge at 1.3365, followed by 1.34 and 1.3450.