NEW YORK (Reuters) - The U.S. dollar rose to its highest in 14 years against the euro and a basket of major currencies on Tuesday after data showed solid growth in U.S. manufacturing.

Light is cast on a U.S. one-hundred dollar bill next to a Japanese 10,000 yen note in this picture illustration shot February 28, 2013. REUTERS/Shohei Miyano/Illustration/File Photo

The dollar index .DXY rose to 103.820, its highest level since December 2002 after data showed U.S. factory activity accelerated to a two-year high last month and construction spending rose to its highest in 10-1/2 years in November.

The index, which tracks the greenback against a basket of world currencies, appeared set for its biggest one-day percentage rise in more than two weeks in 2017’s first full day of trading.

“Job growth appears to be picking up, orders are picking up quite strongly, prices are increasing quite strongly as well,” said Shaun Osborne, currency strategist at Scotia Capital in Toronto. “That suggests the (Federal Reserve) is going to have to remain active in this kind of environment. So this on the whole is a generally constructive set of data for the dollar here in a time of the year where typically the dollar does quite well.”

The growing consistency of strong U.S. economic reports has led to expectations of increased tightening of interest rates from the Fed and rosier outlooks on the overall health of the world’s largest economy, analysts said.

That has helped elevate the dollar to its strongest in nearly a decade and a half as investors gear up for expected cuts in regulations and tax rates, as well as increased fiscal spending, from the administration of President-elect Donald Trump.

The euro EUR= fell to a 14-year low against the dollar, dropping to $1.0342 after the data's release.

The dollar gained against the yen JPY= as well, reaching 118.60 yen, its highest since Dec. 15 and just a hair below its highest point since February as a holiday in Japan thinned Asian trading.

It later retraced much of those gains, even turning negative against the yen after investors took profits on the day’s strong moves. The dollar was last up 0.1 percent at 117.64 yen.

The greenback rose to its highest against the Mexican peso MXN= since Nov. 11, the day it hit its all-time high, after Ford Motor Co said would cancel a planned $1.6 billion factory in Mexico and instead invest $700 million in a Michigan plant due to sagging demand for small cars. Ford had faced criticism from Trump for its Mexican investment plans and the company's executive chairman, Bill Ford Jr., said he personally notified the president-elect of the decision.