(Corrects second paragraph to say Tuesday, not Wednesday)
* Euro gains vs dlr; trade still very thin
* Aussie jumps more than 1 pct to 12-day high vs dollar
* Dlr stays supported vs yen on U.S. economic outlook
(Recasts, adds quote, updates prices)
NEW YORK, Dec 29 (Reuters) - The dollar traded lower
against the euro and higher-yielding currencies such as the
Australian dollar on Tuesday on improved risk appetite amid
expectations for a U.S. economic recovery.
U.S. data released on Tuesday, including consumer
confidence data, confirmed the U.S. economy is improving but
failed to overwhelm investors [].
Volumes were also thin and analysts were wary of drawing
too many conclusions from intraday movements.
The U.S. consumer confidence report, issued by the
Conference Board, "confirms the market's view that the economy
is stabilizing and 2010 will be a better year than 2009," said
Michael Woolfolk, senior currency strategist at BNY Mellon. "
In New York trade, the euro was up 0.3 percent at $1.4420
<EUR=>, off the session peak but still rebounding from a
3-1/2-month low hit a week ago.
"Thin year-end activity has seen the U.S. dollar weaken,"
Marc Chandler, head of global currency strategy at Brown
Brothers Harriman in New York, said in a note to clients. "Some
contacts linked the euro buying to month-end demand, with some
tied to sterling offers too."
The higher-yielding Australian dollar rose 1.2 percent to a
12-day high, and last traded at US$0.8876 <AUD=>. The New
Zealand dollar <NZD=> gained 1.5 percent to US$0.7191.
The dollar index, a non-traded gauge of the greenback's
performance against six major currencies, fell 0.2 percent to
77.475 <.DXY>.
The dollar index was still in sight of a 3-1/2-month high
touched last week, but some traders said the U.S. currency may
struggle to rise further after speculators have finished
covering short dollar positions.
Data on Monday showed speculators were long in the U.S.
currency for the first time since May, ending 32 straight weeks
of short dollar positions. []
Against the yen, the dollar rose 0.1 percent to 91.69 yen
<JPY=>, within reach of a two-month high set last week.
Traders said upward pressure on long-term Treasury yields
is providing support to the dollar against the yen after U.S.
government bonds traded lower the previous day and pushed the
benchmark 10-year note yield to its highest in nearly five
months. []
The dollar showed little reaction to the Federal Reserve's
proposal on Monday to create a new mechanism, a "term deposit
facility", to help the central bank's policymakers withdraw
money from the banking system when they decide to tighten
monetary policy. []
There was also limited reaction to a Standard &
Poor's/Case-Shiller indexes report on Tuesday showing U.S. home
prices were unchanged in October, dashing hopes for a sixth
straight monthly increase. [].
(Reporting by Nick Olivari)
