Dollar rises in tandem with US yields before paring gains on recovery in US stocks

The greenback ended higher against majority of its peers in thin trading conditions on Monday due to a rally in U.S. Treasury yields together with expectations that upcoming release of Federal Reserve meeting minutes would paint a hawkish tone.  
  
On the data front, Reuters reported U.S. manufacturing activity slowed for a second straight month in April, but supply bottlenecks appeared to be easing, with the pace of increase in prices for inputs and the backlog of unfinished work at factories moderating.  The Institute for Supply Management (ISM) said on Monday that its index of national factory activity fell to a reading of 55.4 last month from 57.1 in March.  
  
Versus the Japanese yen, dollar found renewed buying at 129.62 at Asian open and gained to session highs at 130.47 at European open. Despite retreating to 129.71 at New York open due partly to cross-buying in jpy, price rebounded to 130.35 in tandem with U.S. yields where benchmark 10-year hit a 3-1/2 year high of 3.01%.  
  
The single currency remained under pressure in Asia and retreated to 1.0511 ahead of European open and despite rising briefly but sharply to 1.0568 in thin European trading, price fell to session lows of of 1.0491 in New York afternoon on usd's strength before recovering in tandem with U.S. equities.  
  
The British pound retreated in tandem with euro to 1.2541 ahead of European open before rebounding to 1.2587 in early European morning. Cable then met renewed selling there and fell to session lows of 1.2474 on usd's strength together with cross-selling of sterling especially vs euro.  

Data to be released on Tuesday

New Zealand building permits, GDT price index, Australia RBA interest rate decision Japan Market Holiday, China Market Holiday, France budget balance, Germany unemployment rate, unemployment change, U.K. Markit manufacturing PMI, EU producer prices, unemployment rate, U.S. redbook, durable goods, durables ex-defense, factory orders, durables ex-transport, JOLTS job openings.