Asian session: The dollar rose versus the majority of its 16 major counterparts

The dollar rose versus the majority of its 16 major counterparts as investors sought the relative safety of the U.S. currency amid concern China’s economy is slowing and Europe’s debt crisis is deepening. The greenback climbed against its Australian and New Zealand peers after a report showed China’s manufacturing grew less than forecast last month. China’s manufacturing Purchasing Managers’ Index fell to 50.4 last month from 53.3 in April, the statistics bureau and logistics federation said in a statement today in Beijing. It’s the weakest reading since December and compares with the 52.0 median forecast in a Bloomberg News survey. A reading above 50 indicates expansion.

The dollar’s appeal was also boosted after leaders of Italy and the European Central Bank clashed with Germany by demanding bolder steps to stabilize the economies of the 17-nation euro bloc. In Europe, Italian Prime Minister Mario Monti and ECB President Mario Draghi pushed Germany to give up its opposition to direct euro-area aid for struggling banks.

Monti told a Brussels conference yesterday that German Chancellor Angela Merkel’s vision of a stable economy “risks being undermined because of lack of promptness in setting up the necessary instruments to limit the contagion.”

The yen weakened after Japanese Finance Minister Jun Azumi pledged to take “decisive” action if excessive gains in the currency persist. “We will continue to carefully monitor currency market moves with more caution,” Azumi told reporters in Tokyo today. “If these excessive moves continue, I think I must take decisive action” on the yen, he said.

EUR/USD: during the Asian session the pair fell, updated a monthly low.

GBP/USD: during the Asian session the pair fell to a yesterday's low.

USD/JPY: during the Asian session the pair restored after yesterday's falling.

It is a busy day for European and US data on Friday, including PMI data and also the non-farm payrolls from the US. Data sees the UK weekly John Lewis store sales data early on and then the 0630GMT release of the RBA Index of Commodity Prices from Australia. The final manufacturing PMI releases for France (0750GMT), Germany (0755GMT) and the main EMU number (0800GMT) are also due this morning

and are expected to confirm preliminary readings including 45.0 for the EMU data. The main US data is due at 1230GMT with the US labor market data, released at the same time as personal income data. Non-farm payrolls are forecast to rise 150,000 in May after the relatively modest 115,000 rise in April. The US Markit final April purchasing managers report is due at 1300GMT, while at 1400GMT, Manufacturing ISM report and construction spending data are due.