US Dollar prices register significant gains
The US Dollar (USD) gained strength against various global currencies on Tuesday due to the release of fresh economic data, demonstrating the robustness of the US economy when compared to the United Kingdom and the European Union.
In October, the US witnessed an upturn in business output, with the manufacturing sector breaking out of a five-month decline thanks to an increase in new orders. Additionally, the services sector exhibited modest acceleration, coupled with signs of easing inflationary pressures, as reported by S&P Global.
This data is the latest indicator that the US economy remains resilient in the face of rising interest rates driven by the Federal Reserve's efforts to combat inflation.
The dollar index, which assesses the strength of the US dollar against a group of six major currencies, rose by 0.6% to reach 106.19. Earlier in the same session, the index had dropped to a one-month low of 105.35.
Helen Given, an FX trader at Monex USA, emphasized, "The bigger picture remains clear, especially when comparing the US PMI with the recent releases 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 Eurozone reported contractions, underscoring the continuing strength of the US economy in comparison to its global counterparts."