The greenback slumped against the majors on the heels of softer US economic data, ahead of Friday's key jobs report. Weekly jobless claims crept above the 400k-level to 407k, jumping from 366k a week earlier. Although the services ISM figure for March edged out consensus forecasts to 49.6 and improving from 49.3, it still remains beneath the 50-level that distinguishes expansion from contraction.

Traders will turn their attention to March non-farm payrolls, estimated to post a loss of 60k jobs, and compared with 65k lost in February. The March unemployment rate is also seen deteriorating, climbing to 5.0% versus 4.8% a month earlier.

Euro Recovers
The euro bounced off its overnight lows just above the 1.55-level to trade back above the 1.56-mark by the New York session. Weak Eurozone economic reports undermined the single currency, with retail sales for February missing consensus forecasts, falling by 0.5% versus a 0.4% increase a month earlier and down 0.2% compared with a 0.1% decline in the previous year. The Eurozone services PMI fell to 51.6 in March, down from 52.3 in the previous month, while Germany's services PMI declined to 51.8 from 52.2.

A barrage of comments from Eurozone officials revealed further displeasure with the currency's strength. France's Finance Minister Lagarde said the net effect of the current currency situation is painful for the Eurozone. The Eurogroup's Juncker expressed displeasure with disorderly foreign exchange moves and excessive currency volatility. However, Belgian Finance Minister Reynders offered an opposing view, saying the strong euro was not such a big problem at the moment. Meanwhile, the ECB's Garganas reiterated the Bank's hawkish stance, calling the recent acceleration of Eurozone inflation as ?Žvery worrying' and that while inflation risks remain on the upside, it was important to not become entrenched in expectations. Moreover, he does not expect inflation to drop below 2% in 2009. He also echoed a similar tone on the euro's strength, saying recent moves have been abrupt and raised concerns.

EURUSD recovered off its lows and hovers near 1.5675 with interim resistance seen at 1.57, followed by 1.5740 and 1.58. Additional ceilings are seen at 1.5830, backed by 1.5860 and 1.59. On the downside, support is seen at 1.5640, followed by 1.56 and 1.5570. Subsequent floors are eyed at 1.5530, backed by 1.55 and 1.5470.