* Dollar pares earlier gains
* Traders discount ECB officials' comments
* U.S. consumer confidence data strong
(Updates prices, adds analyst comments)
By Sam Forgione
NEW YORK, March 25 The dollar pared gains
against a basket of major currencies on Tuesday but still ended
slightly higher on the day, after traders played down strong
U.S. consumer confidence data and the potential for the European
Central Bank to ease further.
The dollar was up modestly against a basket of currencies,
retreating from earlier gains after traders discounted data
showing U.S. consumer confidence was stronger than expected in
March and climbed to its highest level since January 2008.
"There is an expectation that the U.S. data is going to
improve as the weather gets better," said Brian Dangerfield,
currency strategist at RBS Securities in Stamford, Connecticut.
Dangerfield said many traders expected U.S. economic data to
bounce back after weakness at the start of the year, when many
traders blamed soft U.S. economic data on frigid temperatures.
As a result, the strong U.S. consumer confidence data had a
limited impact in boosting the dollar, he said.
Other mixed economic data had a muted impact on the dollar.
U.S. single-family home prices rose slightly more than expected
in January, while other data showed sales of new U.S.
single-family homes fell in February.
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.
Commerce Department data, meanwhile, showed 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
The euro trimmed its losses against the dollar after traders
discounted statements from ECB president Mario Draghi, ECB
governing council member and Bundesbank chief Jens Weidmann, and
ECB governing council member Jozef Makuch that signaled further
easing was an option.
The ECB "has said the options were open since October, and
they haven't really delivered anything since then, and I think
that's the key message," said Jens Nordvig, head of G10 FX
strategy at Nomura Securities International.
The U.S. dollar index, which measures the dollar
against six major currencies, was last up just 0.01 percent. The
euro was last down 0.09 percent against the dollar to
trade at $1.3827, while the dollar was last up 0.04 percent
against the yen to trade at 102.28.
The dollar was last up 0.22 percent against the Swiss franc
to trade at 0.8827 francs.
The dollar's slight rise still marked a recovery from
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.
Russia's ruble currency held gains against the dollar
after U.S. President Barack Obama and his allies agreed to hold
off on more damaging economic sanctions unless Moscow goes
beyond the seizure of Crimea.
"Escalation is being avoided," said Nordvig of Nomura.
The dollar was last down 1.55 percent against the ruble to
trade at 35.5225 rubles.
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