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US Dollar Outshines Other Currencies
The US dollar forged ahead against an array of currencies on Tuesday, bolstered by new economic indicators underscoring the robustness of the American economy vis-à-vis the European Union and the United Kingdom.
In October, the output of US businesses inched forward, led by the manufacturing sector's revival from a five-month slump, thanks to a rise in new orders. S&P Global also pointed out on Tuesday an uptick in service sector activity resulting from abating inflation pressures.
America's Economy Shows Resilience
This supports the growing evidence that the American economy is enduring the uptick in interest rates created by the anti-inflation efforts of the Federal Reserve.
The US dollar index, a barometer of the currency's potency against six other currencies, experienced a 0.6% high, reaching 106.19. Earlier, during the same trading session, the index briefly fell to a one-month low of 105.35.
"Overall, the broader view remains uncompromised, particularly when juxtaposing US PMI with the simultaneous reports of the UK and the euro zone this morning," said Helen Given, FX trader at Monex USA.
Europe Falters; US Continues to Stand Strong
While all three main US PMI readings (manufacturing, services, and composite) cast a positive shadow, the UK and Eurozone registrations hint at contractions. This serves to reiterate the persistent resilience of the larger US economy as compared to its global counterparts,” she added.
Earlier, survey statistics revealed an unexpected deterioration in euro zone business activity this month, hinting that the area might tip the scale into recession. Following this revelation, the euro reversed track, ending 0.7% lower at $1.05975.
Particularly gloomy was the German data, with the PMI survey indicating that the services sector had followed manufacturing into the negative zone.
U.S. Bond Yields:
Global financial markets were rattled by the rocketing U.S. bond yields, leading the 10-year Treasury yield to surpass 5% on Monday, marking its peak since July 2007. Earlier this month, the ensuing rise in yields propelled the dollar index to almost a one-year high.
Bitcoin Makes Gains amidst Uncertainty
Regarding cryptocurrencies, Bitcoin maintains its upward trend, spurred by surmise that an exchange-traded Bitcoin fund is on the horizon. The world’s biggest cryptocurrency, in terms of market cap, escalated a further 4.1% at $34,423.
