The dollar touched a two-week high against the yen on Friday and rose from a two-month low versus a basket of major currencies, supported by signs that the U.S. economy may be stabilizing after a recent soft patch.

U.S. economic reports were mixed on Friday, however, with some weakness noted in manufacturing and construction. That did not stop investors from buying back what has been an oversold dollar. Yields on U.S. 30-year government bonds and 10-year notes hit seven-week highs, also underpinning the greenback.

Data showed that U.S. manufacturing activity held at a near two-year low in April, but a jump in consumer sentiment and stronger-than-expected vehicle sales suggested the economy was pulling out of a weak phase in its cycle.

Separately, the Commerce Department said construction spending slipped 0.6 percent to an annual rate of $966.6 billion, the lowest level since September.

The net effect of the data was positive on the dollar.

The U.S. currency started to gain momentum on Thursday after the release of more positive economic data. Signs that the labour market was recovering with initial jobless claims dropping, wages rising along with a jump in Midwest business activity, all combined to draw investors back to the greenback.

Volumes were on the lower side with most of Europe shut for the May Day holiday.

In the UK, which was open for trading, sterling fell sharply against the dollar and the euro after British manufacturing data showed growth cooling before a tightly fought election.

In late morning trading, the dollar rose against the yen, supported by Treasury yields' rise. The dollar was up 0.6 percent at 120.11 yen. It hit a two-week high of 120.24.

The dollar index was up 0.5 percent at 95.055, having suffered its worst month in four years in April.

The euro was flat at $1.1223,after earlier hitting a two-month peak. The euro has been aided recently by a surge in German yields as fears of deflation in Europe eased somewhat.

EUR/USD: $1.1000(E1.6bn), $1.1070(E1.4bn), $1.1100(E909mn), $1.1200(E903mn), $1.1250(E1.0bn)

USD/JPY: Y118.00($1.3bn), Y119.00($1.3bn), Y120.00($421mn), Y121.00($1.1bn)

GBP/USD: $1.5100(Gbp228mn), $1.5450(Gbp272mn), $1.5500(Gbp414mn)

USD/CHF: Chf0.9500($240mn)

AUD/USD: $0.7700(A$2.6bn)

NZD/USD: $0.7300(NZ$435mn)

EUR/USD

Offers 1.1260 1.1280 1.1300 1.1320 1.1350 1.1385 1.1400

Bids 1.1225-30 1.1200 1.1180 1.1165 1.1140 1.1120 1.1100 1.1080 1.1050

GBP/USD

Offers 1.5380 1.5400 1.5420-30 1.5450 1.5480 1.5500 1.5525 1.5560

Bids 1.5320 1.5300 1.5280 1.5250 1.5225-30 1.5200

EUR/GBP

Offers0.7330-35 0.7350 0.7385 0.7400 0.7440

Bids 0.7300 0.7280 0.7265 0.7240 0.7220 0.7200

EUR/JPY

Offers 135.00 135.25 135.50 135.80 136.00

Bids 134.50 134.00 133.60 133.00 132.80 132.50 132.00

USD/JPY

Offers 120.00 120.20 120.50 120.80 121.00

Bids 119.60 119.40 119.20 119.00 118.80 118.40-50 118.25 118.00

AUD/USD

Offers 0.7925-30 0.7950 0.7980 0.8000 0.8025-30 0.8050

Bids 0.7850-60 0.7830 0.7800 0.7780 0.7750

EUR/USD: $1.1000(E1.6bn), $1.1070(E1.4bn), $1.1100(E909mn), $1.1200(E903mn), $1.1250(E1.0bn)

USD/JPY: Y118.00($1.3bn), Y119.00($1.3bn), Y120.00($421mn), Y121.00($1.1bn)

GBP/USD: $1.5100(Gbp228mn), $1.5450(Gbp272mn), $1.5500(Gbp414mn)

USD/CHF: Chf0.9500($240mn)

AUD/USD: $0.7700(A$2.6bn)

NZD/USD: $0.7300(NZ$435mn)

(Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual)

00:00 China Bank holiday

01:00 China Manufacturing PMI April 50.1 50 50.1

01:00 China Non-Manufacturing PMI April 53.7 53.4

01:30 Australia Producer price index, y/y Quarter I 1.1% 0.7%

01:30 Australia Producer price index, q / q Quarter I 0.1% 0.5%

01:30 Japan Labor Cash Earnings, YoY March 0.1% 0.1%

01:35 Japan Manufacturing PMI (Finally) April 50.3 49.7 49.9

The dollar was moderately higher against the yen and the euro in quiet Asia trade Friday, with many investors avoiding taking strong positions ahead of Japan's "Golden Week" holidays next week.

Amid increased uncertainty over the timeframe for the Federal Reserve to raise short-term rates, the dollar may gain traction if April ISM manufacturing index scheduled later Friday signals a U.S. economic recovery for the second quarter, market participants said.

But Mr. Ueno said the dollar's downside still remains solid as "there are a slew of investors lining up to buy (the dollar on dips) in need, regardless of U.S. economic indicators," adding that some of them were supposed to leave buy orders during holidays in Japan.

Market participants showed a muted reaction to Japan's consumer price data earlier the day, which showed inflation in Japan rose for the first time in almost a year in March with a 0.2% on-year gain but remains far below the Bank of Japan's 2% target.

EUR / USD: during the Asian session the pair fell to $1.1200

GBP / USD: during the Asian session, the pair was trading around $1.5345

USD / JPY: during the Asian session the pair rose to Y119.75

UK mfg PMI due at 0830GMT provides the domestic highlight this morning, accompanied by lending data.

EUR / USD

Resistance levels (open interest**, contracts)

$1.1361 (1863)

$1.1322 (2827)

$1.1289 (4681)

Price at time of writing this review: $1.1207

Support levels (open interest**, contracts):

$1.1126 (1971)

$1.1094 (1065)

$1.1058 (3345)

Comments:

- Overall open interest on the CALL options with the expiration date May, 8 is 62588 contracts, with the maximum number of contracts with strike price $1,1200 (6614);

- Overall open interest on the PUT options with the expiration date May, 8 is 87031 contracts, with the maximum number of contracts with strike price $1,0000 (9280);

- The ratio of PUT/CALL was 1.39 versus 1.24 from the previous trading day according to data from April, 30

GBP/USD

Resistance levels (open interest**, contracts)

$1.5604 (1171)

$1.5506 (2814)

$1.5410 (1036)

Price at time of writing this review: $1.5346

Support levels (open interest**, contracts):

$1.5290 (1392)

$1.5193 (1402)

$1.5096 (1096)

Comments:

- Overall open interest on the CALL options with the expiration date May, 8 is 26506 contracts, with the maximum number of contracts with strike price $1,5500 (2814);

- Overall open interest on the PUT options with the expiration date May, 8 is 36587 contracts, with the maximum number of contracts with strike price $1,4700 (2691);

- The ratio of PUT/CALL was 1.38 versus 1.34 from the previous trading day according to data from April, 30

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

(pare/closed(GMT +3)/change, %)

EUR/JPY $1,1213 +0,87%

GBP/USD $1,5346 -0,53%

USD/CHF Chf0,9329 -0,78%

USD/JPY Y119,41 +0,27%

EUR/JPY Y133,91 +1,14%

GBP/JPY Y183,23 -0,27%

AUD/USD $0,7900 -1,16%

NZD/USD $0,7602 -0,03%

USD/CAD C$1,2068 +0,44%

(time / country / index / period / previous value / forecast)

00:00 China Bank holiday

01:00 China Manufacturing PMI April 50.1 50.04

01:00 China Non-Manufacturing PMI April 53.7 53.59

01:30 Australia Producer price index, y/y Quarter I 1.1% 0.9%

01:30 Australia Producer price index, q / q Quarter I 0.1%

01:30 Japan Labor Cash Earnings, YoY March 0.1%

01:35 Japan Manufacturing PMI (Finally) April 50.3 49.7

06:00 France Bank holiday

06:00 Germany Bank Holiday

06:00 Switzerland Bank holiday

08:30 United Kingdom Net Lending to Individuals, bln March 2.5

08:30 United Kingdom Consumer credit, bln March 740 808.4

08:30 United Kingdom Purchasing Manager Index Manufacturing April 54.4 52.51

08:30 United Kingdom Mortgage Approvals March 61.76 61

12:30 U.S. FOMC Member Mester Speaks

13:45 U.S. Manufacturing PMI (Finally) April 55.7 54.2

14:00 U.S. Construction Spending, m/m March -0.1% 0.29%

14:0 U.S. Reuters/Michigan Consumer Sentiment Index (Finally) April 93.0 95.9

14:00 U.S. ISM Manufacturing April 51.5 51.61

20:00 U.S. Total Vehicle Sales, mln April 17.2 17.2