The US Dollar (USD) gained strength against various global currencies onTuesday due to the release of fresh economic data, demonstrating therobustness of the US economy when compared to the United Kingdom and theEuropean Union.
In October, the US witnessed an upturn in business output, with themanufacturing sector breaking out of a five-month decline thanks to anincrease in new orders. Additionally, the services sector exhibited modestacceleration, coupled with signs of easing inflationary pressures, asreported by S&P Global.
This data is the latest indicator that the US economy remains resilient inthe face of rising interest rates driven by the Federal Reserve’s effortsto combat inflation.
The dollar index, which assesses the strength of the US dollar against agroup of six major currencies, rose by 0.6% to reach 106.19. Earlier in thesame session, the index had dropped to a one-month low of 105.35.
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Helen Given, an FX trader at Monex USA, emphasized, “The bigger pictureremains clear, especially when comparing the US PMI with the recentreleases from the UK and the Eurozone this morning.”
She further noted, “While all three PMI readings for the US (manufacturing,services, and composite) were positive, both the UK and the Eurozonereported contractions, underscoring the continuing strength of the USeconomy in comparison to its global counterparts.”