Shorter-dated U.S. Treasuries yields climbed to their highest levels in more than six weeks on continued bets that Friday's U.S. payrolls data for October would be strong enough for the Fed to hike rates at the end of the year.
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The U.S. Commerce Department reported manufacturing orders fell 1.0 percent in September, slightly worse than the average analysts' forecast in a Reuters poll. Non-defense capital goods excluding aircraft, often seen as a measure of business confidence and spending plans, slipped 0.1 percent instead of the 0.3 percent drop reported last month, suggesting the worst of the manufacturing slump could be over.
"It's hard to look at any one release and say 'A-ha, you're responsible"' for the rise in the dollar, said Richard Cochinos, head of European G10 FX strategy at Citigroup in London.
"But I think the market is focused on (the fact that) yields keep rising in the U.S., and that's leading to expectations for (nonfarm) payrolls on Friday and more expectations of the Fed and U.S. growth. And what we do see for U.S. growth is consumption remains quite strong."
The Australian dollar gained 0.53 percent against the U.S. dollar to $0.7194 after the Reserve Bank of Australia announced it would leave interest rates unchanged. The Aussie earlier had traded as high as $0.7220. Against the euro, the Australian dollar was up 1.04 percent at A$1.5232.
In the world of web-based "cryptocurrencies," bitcoin reached an 11-month high of $393.74 on the Bitstamp exchange on Tuesday. It has gained more than 80 percent since dipping below $200 in late August.