The US dollar steadied after dropping this week to fresh lows against the euro and Canadian dollar. The euro moved further above 1.12 to new six-month highs, boosted by more favourable data from Europe. Canada’s loonie strengthened to four-week highs, supported by oil keeping above $50. Sterling softened in the wake of a deadly bomb blast in the UK.

Euro

The euro looks poised to test new highs in the days and weeks ahead after data this week depicted the bloc’s recovery deepening its roots. Germany’s Ifo index of business confidence rose more than expected to 114.6 in May, the highest in more than a quarter century. Positive data can give more traction to euro rallies by making a case for the ECB to cut back on its aggressive low rate policies in the months ahead.

GBP

The market took a favourable turn for pound buyers on Tuesday as sterling moved a penny below recent eight-month highs. Sterling is showing some fatigue after racing to September highs last week. The pound has spent the better part of the past month in rally mode on hopes that Britain’s snap election on June 8 would help unite a divided Parliament on Brexit and help strengthen its hand at the negotiating table with the EU. That hopeful scenario receded as opinion polls on Monday showed the lead for Prime Minister Theresa May chopped in half. The deadly attack late on Monday in Manchester did little to revive buying of UK assets, like sterling.

USD

America’s dollar steadied after slumping to new six-month lows this week. Dollar bulls will parse the central bank notes for signs that officials could raise interest rates when they next assemble on June 13-14. Former FBI chief James Comey offered congressional testimony and any comments from Comey that work against the administration would weigh on the dollar, while an absence of news could work in the dollar’s favour.