* Dollar hits fresh 2009 low vs basket of currencies, euro
* Early dollar recovery short-lived
* Mkt optimistic on global econ; US home sales data jumps
* Aussie hits 8-mo high vs dollar, sterling at 7-mo peak
(Recasts, updates prices, adds comment)
By Nick Olivari
NEW YORK, June 2 (Reuters) - The dollar fell on Tuesday to
its lowest level this year against the euro and a basket of
currencies, reversing earlier gains, on rising risk tolerance
fueled by views the global economy is on the road to recovery.
The U.S. currency had recovered some of Monday's losses
earlier in the global trading day, but those gains eroded as
the New York session opened. A report on April U.S. pending
home sales showing the biggest jump in 7-1/2 years helped to
renew the recent rally in higher-risk currencies.
[].
Sterling hit a seven-month high versus the greenback, while
the Australian dollar rose to an eight-month peak to extend the
previous day's gains.
Analysts said the dollar's failure to recover shows
investors are convinced the global economy is over the worst,
which encourages them to buy higher-risk currencies and
assets.
The pending home sales data "has further added to negative
sentiment on the dollar," said Omer Esiner, senior currency
analyst at Travelex Global Business Payments in Washington.
"That said, it's too early to say that we have turned the
corner. But it has become apparent that the worst of the credit
crisis has passed and that should sap safe-haven demand for the
dollar."
The dollar index fell to a low of 78.437 <.DXY>, its
weakest since mid-December. It last traded at 78.58, down 0.8
percent on the day.
The euro hit a 2009 high of $1.4314 <EUR=EBS> on electronic
trading platform EBS. The euro last traded at $1.4283, up 0.9
percent.
The Australian dollar jumped to an 8-month high of $0.8208
<AUD=D4>, according to Reuters data, having earlier fallen as
low as $0.8050, while sterling hit a seven-month high of
$1.6579 <GBP=D4>, according to Reuters data.
The New Zealand dollar, another higher-risk currency, also
touched an eight-month high against its U.S. counterpart at
$0.6573 <NZD=D4>, according to Reuters data.
Sterling traded up 0.7 percent at $1.6544, while the
Australian dollar was up 1.3 percent at $0.8196 and the New
Zealand dollar gained 1.1 percent to $0.6558.
Sterling had come under pressure earlier in the day,
pressured by news that an Abu Dhabi government-owned firm sold
its shares in major UK bank Barclays <BARC.L>.
The Australian dollar also slipped after the Reserve Bank
of Australia held interest rates at a record low of 3 percent
but said there was scope to ease further if needed.
But investors soon bought back into the global economic
recovery story as they continued to draw optimism from Monday's
stronger-than-expected manufacturing activity surveys from
China, the euro zone, Britain and the United States.
They shrugged off Tuesday's news that the euro zone
unemployment rate rose to 9.2 percent in April, the highest
since September 1999. For more see [].
Analysts noted the dollar's recent fall has coincided with
money shifting out of U.S. Treasuries and into emerging markets
equities and other assets.
"It is not so much a flight from the dollar ... but an
expressed preference for assets with greater yield-enhancement
potential," said Neil Mellor, currency strategist at Bank of
New York Mellon in London.
In other news Tuesday, U.S. Treasury Secretary Timothy
Geithner reaffirmed his faith in a strong dollar and sought to
reassure China over its huge holdings of U.S. Treasury debt,
saying Washington is committed to keeping its currency strong
and inflation low and stable. []
The dollar was last down 0.8 percent against the yen at
95.92 yen on EBS <JPY=EBS>.
(Additional reporting by Jessica Mortimer in London)
(Reporting by Nick Olivari; Editing by Dan Grebler)
