The U.S. dollar, had already favoured its back foot after the Federal Reserve this week went another meeting without boosting interest rates, while it also stopped short of signaling a move at its next meeting in June. The dollar Thursday fell to one- and two-week lows against the euro and a currency basket, and sank three percent against the yen. Expectations for American first quarter growth to slow sharply could also deal a blow to U.S. rate hike prospects, and keep the dollar pointed lower.

EURO

The euro strengthened to within a penny of six-month highs against the dollar, as disappointment over the Bank of Japan made stars of lower-yielding currencies that often flock with the safer crowd. US rate hike uncertainty also propped up the euro at the expense of the dollar, with EURUSD finding further support in the first rise in euro zone economic confidence in four months in April. The longer it takes the Fed to raise rates, the longer the euro should sustain its run of resilience. Levels near or above $1.15 could soon become reality for EURUSD.

GBP

Sterling’s ability to rally in the face of risk-averse markets, a backdrop when it typically under performs against the safer dollar, is a bullish sign. Sterling clung to February highs, riding a tentative wave of optimism that Britain in June may renew its EU membership. Sterling sentiment is improved but not out of the woods. Any revival in the Brexit debate would risk undercutting the pound’s rally.

USD

America’s economy hit the brake, as expected, during the first quarter, with the economy growing at a paltry annual pace of 0.5 percent. That was below forecasts of 0.7 percent and under an already tepid 1.4 percent during the fourth quarter. Still, the dollar took the news in stride as a gauge of inflation rose, while the latest weekly jobless claims held near the healthiest levels in four decade, outcomes that will keep the Fed rate hike conversation going. The Fed Wednesday left rates unchanged while making a few cosmetic changes to its statement, sounding less concerned about global developments, but acknowledging the U.S. economy’s cooler performance. The jury remains out on a June rate hike, but the bar is still set high, leaving the dollar’s weaker bias intact.