The dollar fell broadly on Monday, reversing early gains and halting the previous session's month-end rebalancing rally as below-forecast U.S. manufacturing ISM nN9N2KB00N data underperformed April euro zone manufacturing PMI nL8N2MQ1CQ.
EUR/USD fell early, but no further than April 23's low of 1.2013 on EBS, with help from the euro zone data and ECB vice president Luis de Guindos talking about how the central bank can start to phase out emergency stimulus measures when the pace of coronavirus vaccinations reaches a critical level and the economy accelerates nF9N2KZ00Z.
But even after the disappointing ISM, EUR/USD only marginally cleared the 10-day moving average at 1.2070 before backing off as Treasury yields recovered.
Though less robust than expected and below March's 17-year high, the cause of the ISM miss was largely due to supply bottlenecks, rather than waning demand, though surging prices paid are also an issue, which will keep the inflation going.
Sterling outperformed other majors, with much of London out on holiday, last up nearly 0.7%, but still below the last two weeks' rebound highs at 1.3979/4009.
The UK is hosting this week's G7 meeting, the first in-person since the pandemic nL1N2MQ0A8.
USD/JPY sank in early trading, and briefly after the ISM, but it held support from the 21-day moving average near Monday's 108.90 low.
The early session high at 109.695 ran into supply near the 61.8% Fibo of the March-April slide at 109.64 and the upper 10-day Bolli band.
With Japan closed for Golden Week, Treasury yields are the main USD/JPY driver.
After a late-April recovery, 10-year Treasury yields hit their lowest in four sessions.
Options markets suggest USD/JPY is likely to consolidate roughly in a 108.50-110 range amid this week's ADP, services ISM and monthly employment report.
Aussie and most high-beta currencies recovered most of the ground lost to the dollar on Friday.
Commodities were up broadly on dollar weakness and pandemic recovery expectations.
But the big winner was ether, last up nearly 20% on the day to new record highs above $3,300, after starting the year at $737.50.
Bitcoin has trailed well behind with a 1.6% rise.
Cryptocurrencies remain at the vanguard of what's being called the everything rally, fostered by enormous monetary and fiscal stimulus and pandemic reopenings.
ISM services, where the great majority of U.S. jobs exist, and ADP on Wednesday are the next event risk, followed by jobless claims data Thursday and Friday's monthly U.S. jobs report.
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