* 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 (Reuters) - 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 dollar.
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 New York.
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 September.
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 Peter Galloway)