The dollar and sterling were buoyant on Wednesday, after a surprise rebound in business activity in the United States and the UK raised the likelihood that their respective central banks would have further to go in raising interest rates.
Elsewhere, the kiwi surged after the Reserve Bank of New Zealand (RBNZ) on Wednesday raised rates by an expected 50 basis points, but reiterated that inflation remains too high and employment is beyond its maximum sustainable level.
Data released on Tuesday showed that U.S. business activity unexpectedly rebounded in February to reach its highest level in eight months, while the UK flash composite Purchasing Managers’ Index (PMI) similarly surged to 53.0 this month, above the 50 threshold for growth for the first time since July.
The dollar rose against most major currencies after the upbeat data save for sterling , which jumped 0.6% on Tuesday. It was last 0.05% lower at $1.2107.
In the euro zone, its flash composite PMI likewise climbed to a nine-month high of 52.3 in February, supported by surprisingly strong services growth.
The euro , however, failed to benefit from the data as it slid 0.36% in the previous session. It was last 0.04% higher at $1.0652.
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