1st LD Writethru: U.S. dollar rises on policy divergence

The U.S. dollar climbed against most major currencies on Tuesday as the country's central bank moved closer to a year-end rate hike while its European counterpart signaled to unleash further stimulus to boost the economy.

The greenback was firmly supported as a robust employment report released last week spurred market expectations for an interest rate increase at the Federal Reserve's next policy meeting in December.

U.S. total nonfarm payroll employment increased by 271,000 in October, the largest gain since December 2014. The unemployment rate fell to 5.0 percent, the lowest since April 2008.

The euro came under further pressure after reports emerged on Monday that "a consensus is forming at ECB to take one of its benchmark interest rates deeper into negative territory in December."

Bank of Finland Governor Erkki Liikanen said the bank would use all the instruments at its disposal to boost growth.

The shared currency dropped nearly 0.4 percent against the greenback. The dollar index, which measures the greenback against six major peers, was up 0.35 percent at 99.322 in late trading, the highest level in seven months.

In late New York trading, the euro fell to 1.0704 dollars from 1.0757 dollars in the previous session, and the British pound decreased to 1.5103 dollars from 1.5112 dollars in the previous session. The Australian dollar declined to 0.7020 dollar from 0.7046 dollar.

The U.S. dollar bought 123.24 Japanese yen, higher than 123.10 yen of the previous session. The U.S. dollar rose to 1.0077 Swiss franc from 1.0037 Swiss franc, and it went down to 1.3276 Canadian dollars from 1.3280 Canadian dollars. Endit