FOREX-Dollar falls after Friday's surge as U.S. data disappoints

* U.S. manufacturing sector slows in April amid supply
challenges
* Ethereum hits record high

(Updates to U.S. afternoon)
By Saqib Iqbal Ahmed and Ritvik Carvalho
NEW YORK, May 3 (Reuters) - The dollar slipped against a
basket of currencies on Monday, ceding some of the ground gained
in the previous session, as U.S. Treasury yields retreated and
lackluster data weighed on the American currency
U.S. manufacturing activity grew at a slower pace in April,
likely constrained by shortages of inputs amid pent-up demand
unleashed by rising vaccinations and massive fiscal stimulus.
The data sent U.S. Treasury yields lower. The dollar index =USD , which measures the greenback
against a basket of six currencies, was down 0.3% at 90.969.
The U.S. dollar's sharp rally on Friday may not be the start
of a broader rebound, Shaun Osborne, chief currency strategist
at Scotiabank, said in a note.
"It would take strong additional gains this week to tilt the
risk towards a recovery in the USD and its early form is not
promising," Osborne said.
Bearish sentiment toward the dollar is on the rise after a
brief pullback. U.S. dollar net short positioning rose this week
to the highest level since late March, according to calculations
by Reuters and Commodity Futures Trading Commission data
released on Friday. The U.S. economy is doing better but is "not out of the
woods yet," U.S. Federal Reserve Chair Jerome Powell said on
Monday in remarks that flagged an upcoming central bank study
documenting the disproportionate blow suffered by the less
educated and working parents during the coronavirus downturn.
The dollar fell against the euro on Monday after a survey
showed euro zone factory activity growth surged to a record high
in April, boosted by burgeoning demand and driving a rise in
hiring, although supply constraints led to an unprecedented rise
in unfulfilled orders. Comments by Luis de Guindos, the European Central Bank's
vice president, also helped the euro. The ECB can start to phase
out emergency stimulus measures when the pace of coronavirus
vaccinations reaches a critical level and the economy picks up
speed, he told an Italian newspaper. Trading in foreign exchange markets was thinned by holidays
in Japan, China and Britain, which kept a lid on volatility.
The Australian and New Zealand dollars AUD= NZD= were
firmer on Monday, though not enough to completely recoup
Friday's losses.
Foreign exchange traders will be looking to labor market
data out later this week to read the health of the U.S. economic
recovery and to gauge how the Fed may respond to improving data.
Central bank policy meetings are also scheduled this week in
Australia, Britain and Norway.
In crypto markets, ethereum broke past $3,000 to post a
fresh record high of $3,203.18. ETH= <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates https://tmsnrt.rs/2RBWI5E
Ethereum hits record high, quadruples in value in 2021 https://tmsnrt.rs/3398mwf
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>