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* Dollar index hits highest since December 2002
* Euro hits lowest vs dollar since December 2002
* Dollar hits nearly 3-week high vs yen, Swiss franc
* Solid U.S. manufacturing data reinforces that economy
By Dion Rabouin
NEW YORK, Jan 3 The U.S. dollar rose to its
highest in 14 years against the euro and a basket of major
currencies on Tuesday after data showed solid growth in U.S.
The dollar index rose to 103.820, its highest level
since December 2002 after data showed U.S. factory activity
accelerated to a two-year high last month and construction
spending rose to its highest in 10-1/2 years in November.
The index, which tracks the greenback against a basket of
world currencies, appeared set for its biggest one-day
percentage rise in more than two weeks in 2017's first full day
"Job growth appears to be picking up, orders are picking up
quite strongly, prices are increasing quite strongly as well,"
said Shaun Osborne, currency strategist at Scotia Capital in
Toronto. "That suggests the (Federal Reserve) is going to have
to remain active in this kind of environment. So this on the
whole is a generally constructive set of data for the dollar
here in a time of the year where typically the dollar does quite
The growing consistency of strong U.S. economic reports has
led to expectations of increased tightening of U.S. interest
rates from the Fed and rosier outlooks on the overall health of
the world's largest economy, analysts said.
That has helped elevate the dollar to its strongest in
nearly a decade and a half as investors gear up for expected
cuts in regulations and tax rates, as well as increased fiscal
spending from the administration of President-elect Donald
The euro fell to a 14-year low against the dollar,
dropping to $1.0342 after the data's release.
The dollar gained against the yen as well, reaching
118.60 yen, its highest since Dec. 15 and just a hair below its
highest point since February as a holiday in Japan thinned Asian
The greenback also rose against the Swiss franc to its
highest since Dec. 15.
"Even though there's a lot of doubt and uncertainty and a
lot of weird rhetoric in the U.S., market participants are
giving the benefit of the doubt to an administration that is
going to be very pro-business," said Juan Perez, currency
strategist at Tempus Inc in Washington.
(Reporting by Dion Rabouin; Editing by Dan Grebler)