The greenback climbed, and later pared gains, after a report showed American manufacturing expanded at the fastest pace in two years. Traders will look to Federal Reserve meeting minutes Wednesday and U.S. employment figures Friday to gauge whether the rally can gain steam.

“You’re starting off the year with solid data for the U.S. economy and that’s propelling the dollar further,” said Minh Trang, a senior foreign-exchange trader at Silicon Valley Bank in Santa Clara, California. The bank is the fourth-most accurate currency forecaster, according to Bloomberg’s fourth-quarter rankings.

The greenback rose 0.5 percent to $1.0407 per euro as of 3:10 p.m. in New York, after earlier reaching $1.0341, the strongest since January 2003. After reaching its session high, the currency retreated as a wave of selling took place in the London afternoon. The pullback coincided with a rebound in 10-year U.S. Treasuries as crude prices plunged, spurring demand for haven assets.

The Bloomberg Dollar Spot Index, which measures the greenback against 10 major peers, was up 0.8 percent. Among an expanded universe of 16 peers, the dollar was strongest against the Mexican peso and South African rand.

The Institute for Supply Management said Tuesday that its index increased to 54.7, the fourth straight advance, reflecting firmer output and the biggest pickup in orders growth since August 2009.

The data helped extend the dollar’s three-month advance, which has intensified since Donald Trump’s presidential election in November and was punctuated by a Federal Reserve interest-rate increase last month. The currency has risen more than 6 percent since the U.S. election.

Forecasters including Goldman Sachs Groups Inc., Deutsche Bank AG, BNP Paribas SA, and Nomura Holdings Inc. see the dollar strengthening to parity with the euro this year. HSBC Holdings Plc expects the U.S. currency’s gains to dissipate in the second half.

“The drivers are pretty clear cut right now: its about the divergence in rate spreads, spurred by the growth and policy outlook between the euro and U.S. dollar,” said Mark McCormick, North American head of foreign-exchange strategy at Toronto-Dominion Bank in Toronto.