The U.S. dollar climbed higher on Tuesday as data showing an improvement in U.S. private sector output supported the case for the interest rates to stay restrictive.
Weak economic data from the European region also supported the dollar.
The S&P Global US Composite PMI rose to 51.0 in October 2023, up from September’s 50.2, signaling an acceleration in the pace of private sector output expansion, a preliminary estimate showed.
The S&P Global Manufacturing PMI for the U.S. rose to 50 in October 2023 from 49.8 in September, beating forecasts of 49.5, preliminary estimates showed.
A survey showed Eurozone business activity took a surprise turn for the worse this month. The HCOB’s flash euro zone Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, dropped to 46.5 from September’s 47.2 – hitting its lowest since November 2020.
The euro area private sector shrank for the fifth month in a row in October with output falling the most over a decade if the pandemic period is excluded.
The purchasing managers’ survey results from S&P Global and the Chartered Institute of Procurement & Supply showed the UK private sector activity deteriorated for the third successive month in October.
The dollar index surged to 106.32 before easing to 106.23, but still holding well above the flat line.
Against the Euro, the dollar firmed to 1.0594 from 1.0670. The Pound Sterling was weak as well against the dollar, trading at $1.2161, about 0.7% down from the previous close.
Against the Japanese currency, the dollar is up, fetching 149.90 yen a unit, compared to 149.71 yen Monday evening.
The dollar is weak against the Aussie at 0.6355, and against Swiss franc, it is gaining at CHF 0.8932. The dollar is stronger by about 0.4% at C$ 1.3744.