07:57 AM EDT, 04/23/2024 (MT Newswires) -- The US dollar rose against most trade partner currencies in early European trade on Tuesday but the euro and sterling bucked the trend in G10 FX after S&P Global PMI surveys surprised strongly on the upside of expectations for April.

Many US dollar pairs edged higher during the European morning but the euro, sterling and yen eked out modest gains over the greenback after S&P Global surveys signaled a pick up in their respective economic recoveries to open the second quarter.

Some emerging market currencies also rose including the Mexican peso and Korean won while European stock markets and front end government bond yields edged higher, indicating a continued improvement in risk appetite among investors.

Global market attention now turns to the 09:45 ET release of S&P surveys of the US manufacturing and services sectors where many will now look to see if April's strength in the European services sectors is replicated.

Along the way focus will also be on European Central Bank and Bank of England officials whose speeches will make up for a lack of input from Federal Reserve policymakers who're now in the blackout period ahead of their May 01 rate decision.

A quick summary of foreign exchange activity heading into the US open;

EUR/USD was 0.21% higher at 1.0678 after trading up to 1.0695 following Tuesday's release of the S&P Global PMI surveys.

Europe's single currency was unable to sustain its advance against the dollar even after S&P Global surveys warned of accelerating inflation pressures in April, which could give ECB policymakers pause for thought before cutting interest rates.

Input cost inflation rose at its joint fastest pace for more than a year in April while average selling prices rose at an above average pace "to hint at stubborn inflationary pressures," with many companies reporting "higher wage rates as a key inflation driver alongside greater energy and fuel costs." This was as the HCOB Flash Eurozone Composite PMI Output Index rose to an 11-month high of 51.4 in April, from 50.3 previously, led by a sharp uptick in services sector activity that offset a further moderation of manufacturing output. Attention now turns to an 08:30 ET speech by Bundesbank President Joachim Nagel.

Elsewhere in Europe GBP/USD was quoted 0.37% higher at 1.2393 after trading as high as 1.2389 following the release of a stronger-than-expected S&P Global Services PMI for April.

The UK's services PMI rose substantially faster than was expected when clocking in at an 11-month high for April but Sterling was quick to relinquish its gains, perhaps owing to a surprise slump in output from the UK manufacturing sector and the surveys' signal on the outlook for inflation in the UK services sector, which the Bank of England is watching closely.

The Flash UK Manufacturing PMI fell to 48.7 in April,from 50.3 in March, leaving it below the 50 threshold marking the difference between industry expansion and contraction. However, even more notably, moderating services sector inflation led the overall private sector increase in prices charged during April to register at its slowest pace since February 2021. This matters because Bank of England policymakers have identified high inflation in the services sector and elevated wage growth as being prominent among the factors keeping them from cutting interest rates. Attention in the UK now shifts to an 07:15 ET speech from the BoE's chief economist Huw Pill.

In Asia USD/JPY was 0.03% lower at 154.80 after rising from lows of around 154.65 seen in the overnight session when the Jibun Bank PMI surveys of the manufacturing and services sectors both also surprised on the upside of expectations.

The Jibun Bank Composite Flash PMI rose to 52.6, from 51.7 in March, led by a strong increase in the services sector component of the index and an easing of an earlier reported recession in the manufacturing sector. Commentary from Japanese government officials was also supportive of the yen after member of the House of Councillors Satsuki Katayama was reported to have said authorities could intervene to lift the currency from its current 34-year lows at any time. Attention in Japan now shifts to the 19:50 ET release of the Services Producer Price Index on Tuesday, and Friday's release of Tokyo Core CPI data and the April policy decision from the Bank of Japan.

Back in North America USD/CAD was trading 0.07% higher at 1.3709 after rising from intraday lows around 1.3688, which also marked the pair's lowest level since April 12.

The Canadian dollar was a relative laggard among major currencies Tuesday although it remained the third best performer in the G10 basket for the recent week, perhaps owing to the strength of the US dollar over the period. There is no economic data set for release on Tuesday in Canada where attention now shifts to Wednesday's release of retail sales figures for March. The summary of deliberations from the Bank of Canada's April Governing Council meeting will also garner attention on Wednesday.