Pound & Euro Plunge Drives USD Soar!

<p>&nbsp;Like a sea of red, disappointing economic data stormed the euro and the pound to sink further during the European session.</p><p><br /></p><p>Both the manufacturing and services sectors fell sharply in August, signaling a weakening economic situation in Europe after aggressive interest rate hikes were implemented and inflation remained high.</p><p><br /></p><p>The euro fell sharply after data was published showing the services sector fell for the first time below contraction to an 8-month low and manufacturing the weakest in three years.</p><p><br /></p><p>Also recording drastic gains was the pound after the release of UK PMI data which showed manufacturing and services activity slipped into contraction in August.</p><p><br /></p><p>In fact, the fall in the manufacturing sector is said to put the UK economy on track to contract in the third quarter, according to S&amp;P Global.</p><p><br /></p><p>Following the weakness of the two currencies, the king of the US dollar strengthened its position by jumping further to a new 2-month high.</p><p><br /></p><p><br /></p><p>The dollar index, which measures the greenback's performance against six major currencies, rose as high as 103.80 in the European session.</p><p><br /></p><p>Even so, US dollar investors still need to be careful considering that in the upcoming New York session, US manufacturing and service PMI data will also be released.</p><p><br /></p><p>Any surprise in the recorded figures could trigger more aggressive movements of the currency in the New York session.</p><p><br /></p><p>Meanwhile, the Australian, Canadian and New Zealand dollars resisted receiving the strength of the US dollar, remaining flat at around the same price.</p><p><br /></p><p>In addition, the yen gained support as a safe-haven following fears of an economic recession following gloomy data from the UK and the European Zone.</p>