By Cornelius Luca
New York, May 2 (BridgeNews) - The greenback advanced modestly across the board on flows and with help from a weak euro zone's April purchasing managers' index for the manufacturing sector, which dropped to 49.3 from 51.2 in March.
The euro fell from a five-day high of 89.47 cents, while the dollar reversed losses from an eight-day low of 121.55.
* * * The dollar was also underpinned by the passage of a $1.35 trillion 11-year tax cut plan in the U.S. overnight and from reports that Germany is backing away from an EU corporate takeover code.
Dollar/Swiss franc bounced from a four-day low but remained within Friday's range and sterling/dollar fell from a two-day high of 1.4374.
Meanwhile, dollar/Canada took another step toward 1.5258, the target of a head-and-shoulders pattern, as it sank to a fresh two-month low of 1.5288. The euro area PMI, which declined to a 26 month low, was dragged down by new orders and to a lesser extent output. The decline in the price indices suggests reduced inflationary pressures. On a positive note, the employment indices were relatively stable in April, remaining above 50, suggesting that employment continued to expand. However, employment usually lags changes in output.
The overnight activity has been fairly limited as many Japanese traders remained sidelined during the string of Golden Week holidays and the Continental European traders returned from a long weekend.
Market participants will be faced with speeches by Federal Reserve Gov. Laurence Meyer and San Francisco Federal Reserve Bank President Robert Parry.
Traders will likely keep the major pairs in good two-way traffic, with a bias toward a firm dollar.

Current Previous Change Global Global
NY open NY close low high

USD/JPY 122.02 121.96 0.06 121.55 122.22
EUR/USD 0.8911 0.8932 -0.0021 0.8885 0.8947
EUR/JPY 108.73 108.95 -0.22 108.18 109.34
GBP/USD 1.4307 1.4342 -0.0035 1.4298 1.4374
USD/CHF 1.7297 1.7262 0.0035 1.7240 1.7348
USD/CAD 1.5304 1.5326 -0.0022 1.5288 1.5330
AUD/USD 0.5187 0.5172 0.0015 0.5170 0.5212
NZD/USD 0.4209 0.4184 0.0025 0.4183 0.4235
SP.1 1270.00 -2.50 1266.50 1275.00
ND.1 1941.00 0.50 1915.00 1958.50