Like a sea of red, disappointing economic data stormed the euro and the pound to sink further during the European session.
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.
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.
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.
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&P Global.
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.
The dollar index, which measures the greenback's performance against six major currencies, rose as high as 103.80 in the European session.
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.
Any surprise in the recorded figures could trigger more aggressive movements of the currency in the New York session.
Meanwhile, the Australian, Canadian and New Zealand dollars resisted receiving the strength of the US dollar, remaining flat at around the same price.
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.
