The euro was near one-month peaks against its US rival after it successfully cleared three daunting risk events over the past week. A week ago, the European Central Bank sounded less dovish in acknowledging the bloc’s better economic footing which caused the central bank president, Mario Draghi, to play down prospects of stronger stimulus. The Fed raised rates but did not let the hawks loose in not forecasting a faster pace of rate hikes this year. The Dutch election marked a significant win for the European establishment, suggesting a reduced threat of a far-right, anti-EU candidate winning France’s presidential vote in spring.

GBP

The sterling surged to two-week highs after a Bank of England official voted for an inflation-suppressing interest rate hike. But Kristin Forbes, external member of the Monetary Policy Committee of the Bank of England, was outnumbered as the rest of her eight colleagues voted to keep Britain’s base rate unchanged at 0.25 per cent amid heightened uncertainty ahead of the country’s impending divorce from the EU. Nevertheless, the surprise dissenting vote suggested area lending rates had hit bottom and the next move would be higher. Officials upgraded their forecast for first quarter growth but said that wage growth had been ‘notably softer’, posing an obstacle to higher rates.

USD

The US dollar steadied after a Fed-inspired fall the day before. As the dust settles from the Fed’s third rate hike in a decade and its reaffirming of two more this year, the dollar’s dip is prone to give way to renewed buying at better levels given its still sunny outlook and continued political uncertainty in Europe. Sturdy US fundamentals were on display in US data on Thursday showing fewer jobless claims and better-than-expected news on the Philly Fed index of Mid-Atlantic manufacturing, outcomes supportive of multiple US rate hikes this year.

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