Going into the European session, the currency market started to move after displaying flat trading in the previous session.
This follows the release of manufacturing and services PMI data for the European Zone and the UK in July, which pushed the euro and pound to fall, thus supporting the strengthening of the US dollar.
European Zone manufacturing activity recorded contraction to the weakest level in 3 years and the services sector expanded slowly since January.
In addition, the manufacturing and services sectors in the UK also declined to a six-month low in July.
The euro slipped below the price level of 1.1100 while the pound declined at around 1.2837 against the US dollar.
The dollar index surged as high as 101.41 before paring some gains to around 101.20 against a basket of major currencies.
It should be noted that the PMI data from the United States will also be published in the New York session tonight which could trigger an uncertain movement for the US dollar.
Meanwhile, the Aussie and New Zealand dollars traded steady against the greenback. Investors did not seem to react to Australia's declining PMI data in July.
Meanwhile, Japan's manufacturing PMI data also showed a contraction this month, seeing the yen remain trading weak against the US dollar after reports said the Bank of Japan (BOJ) would maintain its dovish stance.
