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 dollar was last up 0.08 percent against the yen at 104.26 yen, near a roughly three-month high of 104.87 yen.
The dollar index, 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.