Investing.com - The dollar trimmed gains against other major currencies on Tuesday, but remained close to one-and-a-half month highs amid growing expectations for a December rate hike and a U.S. tax reform plan before the end of the year.
The greenback remained supported after upbeat U.S. manufacturing data seemed to boost chances for a December rate hike by the Federal Reserve.
The U.S. dollar has also been supported in recent session by growing hopes for U.S. tax reform after the Trump administration outlined plans for a sweeping overhaul of the U.S. tax code last week.
EUR/USD was little changed at 1.1737 after Catalans voted for independence in a contested referendum on Sunday that ended in violence when police cracked down on polling booths, injuring hundreds of people.
Despite Spanish police measures to disrupt the referendum, which was declared unconstitutional by Madrid, the Catalan government said that 90% of the people votedin favour of breaking away, with a turnout of about 42%.
The pound was lower, with GBP/USD down 0.20% at 1.3253, the lowest since September 14, after data showing that activity in the UK construction sector contracted for the first time in 13 months in September.
Elsewhere, the yen and the Swiss franc were lower, with USD/JPY up 0.31% at 113.11 and with USD/CHF adding 0.17% to trade at 0.9764.
The Australian and New Zealand dollars were weaker, with AUD/USD down 0.28% at 0.7804 and with NZD/USD retreating 0.36% to 0.7166.
In a widely expected move, the Reserve Bank of Australia held its benchmark interest rate at 1.50% at the conclusion of its monthly policy meeting on Tuesday
Commenting on the decision, the central bank said economic growth was expected to pick up gradually in the coming years, but it warned against slow wage growth and high household debt.
Also Tuesday, the Australian Bureau of Statistics said that building approvals rose 0.4% in August, compared to expectations for an increase of 1.1%.
Meanwhile, USD/CAD edged up 0.14% to trade at 1.2575, its highest since August 31.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 93.55 by 05:20 a.m. ET (09:20 GMT), just off a one-and-a-half month highs of 93.78 hit overnight.