* Investors debate QE3 after Bernanke comments on Monday
* U.S. data tempers some QE3 concerns
* Euro-zone worries persist ahead of finance ministers'
meeting
NEW YORK, March 27 (Reuters) - The dollar climbed against
the euro o n Tuesday, snapping two straight sessions of losses as
U.S. data tempered concerns of more stimulus from the Federal
Reserve.
The greenback's rally came a day after comments from U.S.
Federal Reserve Chairman Ben Bernanke raised expectations that
the Fed could yet embark on a third round of quantitative easing
to stimulate the economy further.
On Monday, Bernanke said "further significant improvements
in the unemployment rate will likely require a more rapid
expansion of production and demand from consumers and
businesses, a process that can be supported by continued
accommodative policies." He made those comments to the National
Association for Business Economics.
Until markets have more clarity on the Fed's plans, though,
trading could remain constrained, analysts said.
"From our perspective, people are misinterpreting the
Bernanke speech," said Mark McCormick, a G10 currency strategist
with Brown Brothers Harriman in New York.
"I think people have taken it as sign of quantitative easing
coming down the line, but I think that exaggerates the key
takeaway," he added.
The euro slid 0.2 percent to $1.3329 in late
afternoon New York trade o n Tuesday.
A U.S. report showed home prices were unchanged in January
from December, the first time since July the seasonally adjusted
S&P/Case-Shiller 20-city index has not declined and a sign that
the battered housing market is slowly stabilizing.
A report from The Conference Board industry group showed the
index of consumer attitudes eased to 70.2 from an upwardly
revised 71.6 the previous month, roughly in line with
economists' expectations for a 70.3 reading.
The details of the report were mixed as consumers'
expectations fell, but their assessment of their current
situation rose to the highest level since September 2008.
"The economy is doing a lot better than many people thought,
and the market is going to run with that, but the Fed will not
stand around while U.S. yields back up significantly," said Neil
Mellor, currency strategist at Bank of New York Mellon in
London.
"There will be a cat-and-mouse game between the market and
Bernanke. I think the dollar will be in a range for some time."
The euro zone's sovereign debt crisis could still weigh on
the single currency, as well.
While Germany signaled for the first time on Monday its
willingness to increase the resources available for tackling the
euro-zone debt crisis, several key events remain this week.
Those include a meeting of euro-zone finance ministers in
Copenhagen on Friday and Saturday and Spain's budget
presentation on Friday.
The meeting of finance ministers "could result in some near-
term volatility," said Omer Esiner, chief market analyst with
Commonwealth Foreign Exchange in Washington, D.C. "It's hard to
push the euro up further from these levels without some
catalyst."
YEN STEADIES AFTER DROP
Traders and analysts said moves in U.S. Treasuries would be
key for the dollar. If demand for Treasuries gained steam and
bond yields fell in the wake of Bernanke's comments, the dollar
could face more pressure.
The greenback was up 0.4 percent against the yen at 83.12
yen, though below a recent 11-month high. Against Japan's
yen, the single currency rose 0.1 percent to 110.76 yen
.
The Japanese currency was seen as vulnerable to more
selling, and has been under heavy pressure since Japan announced
monetary easing measures last month.
With the fiscal year ending on March 31, which is Saturday,
expected repatriation flows have done little to support the yen
so far, said Joe Manimbo, a market analyst with Western Union
Business Solutions in Washington, D.C.
"That suggests next week the yen could come under pressure,
since it didn't benefit from expected month- and year-end
flows," he added.
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