The dollar hit its highest level in nearly eight months against the euro and a roughly three-month high against the yen on Tuesday on growing expectations that the Federal Reserve would raise interest rates in December, while the offshore yuan hit a record low.
Traders saw a chance of more than 78 percent that the Fed would raise rates in December, up from a roughly 74 percent chance Monday, according to data from CME Group's FedWatch program.
Recent comments from Fed officials have stoked those expectations, with investors awaiting comments from Atlanta Fed President Dennis Lockhart later in the session.
Reduced U.S. political risk as a result of U.S. Democratic presidential candidate Hillary Clinton leading Republican rival Donald Trump in polls has also helped boost the dollar, analysts said.
"We approach the prospect that the Fed will raise rates in December, especially if we have a status quo result in the U.S. election, which seems more likely," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Ltd in New York. "This is helping the dollar."
The euro fell about 0.3 percent against the dollar and hit $1.0851, its lowest level since March 10. The dollar also hit its highest level since March 10 against the Swiss franc , of 0.9998 franc. The was last up 0.08 percent against the yen at 104.26 yen, near a roughly three-month high of 104.87 yen.
, which measures the greenback against a basket of six major currencies, was last up 0.34 percent at 99.087, near a roughly nine-month high of 99.119 touched earlier on Tuesday.
China's yuan hit its lowest against the dollar since offshore trading was introduced in 2010 of 6.7882 yuan per dollar. The People's Bank of China set the midpoint rate at 6.7744 per dollar prior to market open, weaker than the previous fix 6.7690.
Expectations that the Bank of Japan, European Central Bank and Bank of England may need to increase stimulus even as the Fed tightens also has boosted the dollar, said Joe Manimbo, senior market analyst with Western Union Business Solutions in Washington.
British Finance Minister Philip Hammond said Tuesday he could not see a situation where he would reject a request by the Bank of England to boost the economy by buying more bonds. Sterling dropped to a more than two-week low of $1.2082 after the comments.