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. "It was kind of an issue of relativities in a sense, that while the services sectors performed better across the board, that extra lift that sterling got, was because of that very, very strong performance," said Rodrigo Catril, senior currency strategist at National Australia Bank. "I think the euro is still in a sort of more difficult situation, given that there's a general sense that the ECB still has more work to do, and that puts a little bit of strain in terms of their growth outlook." Against the Japanese yen , the dollar rose to a two-month high of 135.23 in the previous session, and slipped marginally to 134.91 in early Asia trade on Wednesday. The U.S. dollar index stood at 104.13, having gained 0.3% on Tuesday. The rebound in U.S. business activity comes on the back of a recent slew of resilient economic data pointing to a still-tight labour market, sticky inflation and robust retail sales in the world's largest economy. Markets have since raised their expectations of how high the Federal Reserve would need to lift rates to tame inflation, sending U.S. Treasury yields surging. The two-year yields jumped to an over three-month high of 4.738% in the previous session, and last stood at 4.6933%. The benchmark 10-year note yields peaked at 3.9660% in early Asia trade on Wednesday, its highest since last November. In other currencies, the Aussie slid after data showed that Australian wages grew at the fastest annual pace in a decade last quarter, but was still short of market forecasts. The Australian dollar fell about 0.3% after the data, and was last 0.1% lower at $0.6849. The kiwi rose 0.39% to $0.6238, after earlier jumping roughly 0.5% to an intra-day high of $0.6248 immediately after the RBNZ's cash rate decision. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Rae Wee Editing by Shri Navaratnam)
By Rae Wee
SINGAPORE, Feb 22 (Reuters) - 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.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.