Investing.com - The dollar hit fresh lows against the other majors currencies on Tuesday, despite the release of positive U.S. manufacturing activity data, as investors remained cautious ahead of the Federal Reserve’s monthly policy decision due on Wednesday.
EUR/USD gained 0.57% to 1.1043, the highest since October 14.
The Institute for Supply Management said its manufacturing purchasing managers’s index inched up to 51.9 last month from a reading of 51.5 in September. Analysts had expected the index to rise to 51.7 in October.
The dollar remained supported amid growing expectations for a December rate hike by the Fed, despite dropping last Friday after the FBI said it would review more emails related to Hillary Clinton's private email use while she was secretary of state.
The news sparked fresh uncertainty over Mrs. Clinton’s election prospects ahead of the November 8 vote, amid fears over the implications of a victory for Republican candidate Donald Trump.
Elsewhere, GBP/USD held steady at 1.2242.
Sterling showed little reaction after data on Tuesday showed that the Markit U.K. manufacturing PMI came in at 54.3 in October down slightly from 55.4 in September. Economists had expected a reading of 54.5.
USD/JPY slid 0.29% to 104.54, while USD/CHF tumbled 1.01% to 0.9790.
Earlier Tuesday, the Bank of Japan refrained from unveiling fresh stimulus measures at the conclusion of its policy meeting, despite a warning on the inflation outlook.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.62% to 0.7659 and with NZD/USD gaining 0.29% to 0.7173.
In a widely expected move, the Reserve Bank of Australia left its benchmark interest rate unchanged at 1.50% on Tuesday.
Meanwhile, USD/CAD edged down 0.10% to trade at 1.3396, pulling away from Friday’s seven-month high of 1.3432.
The loonie strengthened after Statistics Canada reported that the economy expanded 0.2% in August, matching forecasts, but slowing from a downwardly revised 0.4% advance in July.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.46% at 97.87.
Separately, market sentiment improved after data earlier showed that China’s official manufacturing PMI rose to 51.2 in October from 50.4 the previous month.
The Caixin manufacturing PMI also ticked up to 51.2 this month from 50.1 in September.