The dollar and sterling were buoyant on Wednesday, after a surprise rebound in business activity in the United States and the U.K. raised the likelihood that their respective central banks would have further to go in raising interest rates.

Elsewhere, the kiwi surged after the Reserve Bank of New Zealand on Wednesday raised rates by an expected 50 basis points, but reiterated that inflation remains too high and employment is beyond its maximum sustainable level.

Data released on Tuesday showed that U.S. business activity unexpectedly rebounded in February to reach its highest level in eight months, while the U.K. flash composite Purchasing Managers’ Index (PMI) similarly surged to 53.0 this month, above the 50 threshold for growth for the first time since July.

The dollar rose against most major currencies after the upbeat data save for sterling which jumped 0.6% on Tuesday. It was last 0.05% lower at $1.2107.

In the euro zone, its flash composite PMI likewise climbed to a nine-month high of 52.3 in February, supported by surprisingly strong services growth.

The euro however, failed to benefit from the data as it slid 0.36% in the previous session. It was last 0.04% higher at $1.0652.

“It was kind of an issue of relativities in a sense, that while the services sectors performed better across the board, that extra lift that sterling got, was because of that very, very strong performance,” said Rodrigo Catril, senior currency strategist at National Australia Bank.

“I think the euro is still in a sort of more difficult situation, given that there’s a general sense that the ECB still has more work to do, and that puts a little bit of strain in terms of their growth outlook.”

Against the Japanese yen, the dollar rose to a two-month high of 135.23 in the previous session, and slipped marginally to 134.91 in early Asia trade on Wednesday.

The U.S. dollar index stood at 104.13, having gained 0.3% on Tuesday.

The rebound in U.S. business activity comes on the back of a recent slew of resilient economic data pointing to a still-tight labor market, sticky inflation and robust retail sales in the world’s largest economy.

Markets have since raised their expectations of how high the Federal Reserve would need to lift rates to tame inflation, sending U.S. Treasury yields surging.

The two-year yields jumped to an over three-month high of 4.738% in the previous session, and last stood at 4.6933%.

The benchmark 10-year note yields peaked at 3.9660% in early Asia trade on Wednesday, its highest since last November.

In other currencies, the Aussie slid after data showed that Australian wages grew at the fastest annual pace in a decade last quarter, but was still short of market forecasts.

The Australian dollar fell about 0.3% after the data, and was last 0.1% lower at $0.6849.

The kiwi rose 0.39% to $0.6238, after earlier jumping roughly 0.5% to an intra-day high of $0.6248 immediately after the RBNZ’s cash rate decision.