The dollar was a little changed

The dollar was little changed and continued to trade near six-week highs on strong economic data.

Survey data released Tuesday showed that US business activity unexpectedly rebounded in February, hitting the highest level in eight months. In the eurozone, a survey-based measure of activity also rose to a nine-month high.

Signs of economic strength led traders to expect further interest rate hikes from the Federal Reserve, sending the US S&P 500 down 2.4% and the dollar up 0.33%.

The euro fell slightly to $1.0634 on Wednesday, off Friday’s six-week low of $1.062.

The dollar index rose 0.15% to 104.28, from the six-week high of 104.68 reached late last week.

Investors are now focused on releasing minutes from the Fed’s latest meeting, which could offer more insight into policymakers’ plans.

A blockbuster US jobs report in early February sent the dollar higher, helped by a series of strong data.

Currencies

Traders on Tuesday expected the Fed’s key interest rate to rise to 5.36% in July, based on a derivative market price, according to Refinitiv data.

In early February, expectations were 5.4% below the peak. The Fed raised rates from 4.6% to 4.76%, from 0% to 0.26% until March 2022.

Investors also increased ECB rate bets. Deutsche Bank said on Tuesday it now expects to raise rates to 3.76%, having previously expected them to rise to 3.27% from their current 2.7%.

The dollar fell 0.13% to 134.87 yen after gaining more than 0.53% on Tuesday.

The pound fell by 0.27% to $1.209. It rose 0.62% on Tuesday after British survey data was also strong.

The European Union has a more volatile economic outlook than the United States, which may explain why the market is falling.

If the market pulls back to current levels, the 1.082 level could provide resistance.

Additionally, there was a significant sell-off a few weeks ago, which is unlikely to happen in a vacuum. The euro is likely to continue under downward pressure.