In late morning trading, the dollar index was up 0.3% at 99.511, rising for a second straight day.
The dollar extended gains after data showed new orders for US-made goods fell more than expected in March, dropping 10.3%. Economists polled by Reuters had forecast factory orders tumbling 9.7% in March.
The euro fell 0.6% to $1.0913, while sterling slid 0.3% to $1.244.
The biggest move in the currency markets was the Chinese yuan, which fell to a six-week low of 7.1555 against the dollar in the offshore market.
The dollar was last little changed at 7.1334, but if the yuan falls again, the next levels to watch would be the mid-March low of 7.1651 and early-September low of 7.1975.
The dollar was modestly up against the yen, another safe-haven currency, trading 0.1% higher at 106.965 yen.
With signs pointing to a stronger dollar, speculators cut slightly their net short positions on the US currency against G10 currencies to $9.39 billion in the week to April 28 from $10.67 billion in the week prior to that, when they reached a near two-year high.