* Dollar gains against euro on ECB officials' comments
* U.S. consumer confidence data strong
* Dollar gains despite some weak U.S. housing data
(Updates prices, adds analyst comments, changes byline,
dateline; previous LONDON)
By Sam Forgione
NEW YORK, March 25 The dollar rose against a
basket of major currencies on Tuesday after European Central
Bank policymakers signaled the potential for more monetary
easing, while strong U.S. consumer confidence figures supported
the dollar's gains.
The dollar recovered from Monday's weakness after European
Central Bank governing council member and Bundesbank chief Jens
Weidmann said negative interest rates were an option the bank
could use to counter strong gains in the single currency.
ECB governing council member Jozef Makuch also said that the
ECB was preparing additional nonstandard measures to avoid a
deflationary environment, including the possibility of adding
liquidity. The comments further weakened the euro against the
The comments on more monetary easing had curtailed the
euro's rally against the dollar on Monday, when weak U.S.
manufacturing data undercut traders' hopes that a stronger run
of U.S. economic data would reinforce the Federal Reserve's plan
to tighten monetary stimulus.
Investors had bought the dollar last week after Fed Chair
Janet Yellen suggested the possibility of raising interest rates
early next year. Traders have said that the dollar's strength
will rely on stronger U.S. economic data.
"The comments from ECB policymakers gave people an excuse
the sell the euro after what most people would consider an
unwarranted rally," said Richard Franulovich, senior currency
strategist at Westpac Securities in New York.
While U.S. economic data was mixed on Tuesday, Conference
Board figures showing stronger-than-expected consumer confidence
in March was "most impactful" and supported the dollar, said
Eric Viloria, currency strategist at Wells Fargo Securities in
Viloria said the data boosted the dollar by reinforcing the
Fed's path to less monetary accommodation. Data showing a
slightly better-than-expected rise in U.S. single-family home
prices in January also supported the dollar.
The S&P/Case-Shiller composite index of 20 metropolitan
areas rose 0.8 percent in January on a seasonally adjusted
basis, beating economists' forecast of a 0.7 percent rise.
Traders focused on the stronger U.S. economic data despite
Commerce Department data showing sales of new U.S. single-family
homes fell 3.3 percent to a seasonally adjusted annual rate of
440,000 units in February, the lowest level since last
The U.S. dollar index, which measures the dollar
against six major currencies, was last up 0.2 percent. The euro
was last down 0.35 percent against the dollar to trade at
$1.379, while the dollar was last up 0.08 percent against the
yen to trade at 102.32.
The dollar was also up 0.39 percent against the Swiss franc
to trade at 0.8843 francs.
Meanwhile, the Chinese yuan consolidated gains against the
dollar, a day after posting its biggest rise in nearly 30 months
on speculation the Chinese government would unveil stimulus
measures to support the economy.
(Additional reporting by Anirban Nag in London; Editing by