US Dollar Strengthens on Positive Economic Data. The US dollar strengthened against the euro on Tuesday following the release of the Purchasing Managers’ Index (PMI) data. The PMI report showed a modest expansion in the US manufacturing sector, which bolstered confidence in the American economy. Meanwhile, weaker-than-expected PMI data from Europe caused the euro to fall, amplifying the dollar’s rally.

Investors took the data as a sign of growing divergence between the economic outlooks of the US and Europe. The US PMI recorded 52.3 for September, indicating expansion, while the eurozone’s PMI fell to 47.1, marking a deeper contraction in manufacturing activity. This contrast has added pressure on the European Central Bank (ECB) as inflation remains high and growth continues to falter.

The US dollar continued its upward trajectory on Tuesday. Driven by positive economic data from the US and weak European figures. The latest Purchasing Managers’ Index (PMI) for the US revealed growth in the manufacturing sector. Which reinforced investor confidence in the American economy.

In contrast, the eurozone’s PMI indicated a continued contraction, raising concerns about a potential economic slowdown in the region. As a result, the euro declined against the dollar, with the greenback gaining 0.5%. Market participants are now closely watching for upcoming US jobs and inflation data, which could further shape the currency landscape in the weeks ahead.

As a result, the euro dropped by 0.5% against the dollar, reaching its lowest level in three weeks. Analysts believe that the strength of the US economy could encourage the Federal Reserve to continue its hawkish stance, keeping interest rates elevated. Conversely, the ECB may face challenges in managing inflation without further weakening the eurozone economy.

Currency traders now await the next key data points, including US jobs and inflation reports, which could further affect market movements. For now, the dollar’s gain reflects a resilient US economy while Europe grapples with a slowdown in growth.