America’s buck was mixed a day after it found traction from a statement from the Federal Reserve. European currencies held the upper hand against the dollar, with the euro keeping near five-month peaks. Sterling rebounded from an earlier dip to one-week lows while rivals from Japan and Canada held close to six-week and 14-month troughs, respectively. As expected, the Fed this week kept American interest rates unchanged. While the bank’s statement noted the weak start to the year for the world’s biggest economy, officials also kept their composure and sounded confident that things would turn around as soon as the current quarter. Consequently, the Fed’s still sanguine outlook for growth suggested it was still on track to raise interest rates in the months ahead. Whether a rate hike could arrive as soon as bankers’ next meeting in June will hinge on data, such as yesterday’s US jobs report.

EUR

The euro continued to squeeze juice out of a rally that has propelled it to five-month peaks against the greenback. The euro lost ground after the Fed this week suggested an imminent rate hike was still on the table. But the euro caught a bounce on Thursday from a dose of good news on the 19-nation economy and after Emmanuel Macron reportedly turned in a solid performance in the final debate against his presidential rival, Marine Le Pen. A broad gauge of growth – the composite PMI (purchasing Managers Index) – clocked a six-year high in April, corroborating with the ECB’s view last week that the recovery was becoming ‘increasingly solid.’

GBP

Sterling bounced above earlier one-week lows after the UK economy capped off a bullish week with more encouraging news. Services growth – a primary growth engine – unexpectedly strengthened and at the fastest pace in four months in April. The data followed similarly upbeat data this week on manufacturing and construction. The trio of good news can strengthen the case for the Bank of England to raise borrowing rates from crisis lows sooner rather than later. The BOE’s next interest rate decision is a week away on May 11.