The dollar dropped versus the euro and tested a fresh 15-year low versus the yen on Wednesday as economic data signaled worries of a global double-dip may have been overstated.

Strong manufacturing data from the US and China fueled increased risk appetite, driving stocks higher and the safe haven dollar sharply lower.

Adding to the positive sentiment after a dreary August, the Australian economy grew at its fastest pace in three years in the second quarter.

The dollar slumped to Y83.65 versus the yen before finding its footing. A move below Y83.63 would have taken the buck to its lowest since 1995.

Against the euro, the dollar fell to a two-week low of $1.2845, a full ten cents from June’s 4-year high near $1.18.

The buck dropped more than a penny from its 6-week high versus the sterling, easing to $1.5485.

Manufacturing activity in the month of August unexpectedly expanded at a faster pace, according to a report released by the Institute for Supply Management on Wednesday, with the data easing some of the recent concerns about the outlook for the manufacturing sector.

The ISM said its index of activity in the manufacturing sector rose to 56.3 in August from 55.5 in July, with a reading above 50 indicating growth in the sector. The increase came as a surprise to economists, who had expected the index to fall to a reading of 52.9.

However, a key prelude to Friday’s jobs official jobs report confirmed doubts that the employment situation has improved.

Payroll processor Automatic Data Processing, Inc. (ADP) said that private sector employment unexpectedly showed a modest decrease in the month of August.

The report showed that private sector employment fell by 10,000 jobs in August following a downwardly revised increase of 37,000 jobs in July. Economists had expected employment to increase by 13,000 jobs compared to the addition of 42,000 jobs originally reported for the previous month.

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