Investing.com - The dollar climbed against a basket of the other major currencies on Tuesday as expectations for higher U.S. interest rates underpinned demand, while the Australian dollar was buoyed by upbeat factory data out of China.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.53% at 102.91.
The index had declined on Friday as traders took profits in the wake of a late year rally that propelled the greenback to 14-year highs in December.
The greenback has strengthened broadly on the back of expectations for a faster pace of rate hikes from the Federal Reserve and increased fiscal spending under the incoming Trump administration.
The dollar moved higher against the yen, with USD/JPY advancing 0.28% to 117.82.
Trade volumes remained thin with markets in Japan closed for a holiday.
The euro was little changed, with EUR/USD at 1.0460.
The pound edged higher, with GBP/USD up 0.17% to 1.2294.
The Australian dollar gained ground, with AUD/USD up 0.47% to 0.7220 after data showing that China's factory activity accelerated in December, boosted by stronger domestic demand.
The Caixin manufacturing purchasing managers' index rose to 51.9 from 50.9 in November, well above forecasts for a reading of 50.7.