US inflation data Wednesday.

US non-farm payrolls increased 253,000 for April compared with expectations of a round 180,000, although there was a downward revision for March to 165,000 from the original figure of 236,000. There were small increases in manufacturing and construction employment for the month. There was a small decline in jobs for wholesale trade and temporary help categories.

According to the household survey, the unemployment rate edged lower to 3.4% from 3.5% and below market expectations of 3.6%. The participation rate was unchanged at 62.6% and there was a smaller employment increase of 139,000 with an increase of over 200,000 in those not in the labour force.

There was a 0.5% monthly increase in average hourly earnings compared with expectations of 0.3% with a year-on-year increase of 4.4% from 4.3% and above expectations of 4.2%.

The Federal Reserve Senior Loan survey recorded a tightening of credit standards and weaker demand for business loans. there was also a significant widening of spreads which will make loans more expensive. Overall, there was some relief that there had not been a more substantial tightening of credit conditions.

Markets were continuing to monitor US debt-ceiling developments with Treasury Secretary Yellen warning that cash would run out on June 1st.

The dollar failed to hold initial gains after the US jobs data but did manage to post a limited net advance and the dollar overall edged slightly away from 11-month lows. The Euro lost ground on most crosses with the latest Sentix data recording a fresh decline in economic confidence for May.

Swiss consumer prices were unchanged for April compared with consensus forecasts of a 0.2% increase with the year-on-year increase slowing to 2.6% from 2.9% and also below expectations of 2.8%.

There will be an element of caution ahead of Wednesday’s US consumer prices data.

Consensus forecasts are for the year-on-year rate to hold at 5.0% with the core rate edging lower to 5.5% from 5.6%.

The dollar posted gains in immediate response to Friday’s US jobs data. EUR/USD dipped to lows near 1.0965 before quickly regaining 1.1000 as the dollar retreated. EUR/USD was unable to hold gains and retreated to trade just below 1.1000 on Tuesday.

Higher US yields helped underpin the US dollar. USD/JPY traded above the 135.00 level on Monday. USD/JPY peaked at 135.30 before settling just below 135.00 after Bank of Japan’s Ueda comments on Tuesday.

The Swiss franc dipped after the latest inflation data but recovered ground on Monday. From highs at 0.9870, EUR/CHF retreated to just below 0.9800. USD/CHF also dipped back to just below 0.8900.

Sterling was resilient amid expectations that the Bank of England would raise interest rates at least once more. GBP/USD hit 11-month highs at 1.2670 on Monday before a correction. GBP/USD traded above 1.2600 on Tuesday.

Commodity currencies posted further net gains amid hopes for a peak in global rates. AUD/USD hit highs just above 0.6800 before correcting to around 0.6785. USD/CAD dipped to lows at 1.3315 before a recovery to 1.3365.