The euro remained under pressure, falling with force against the dollar after investors took profits from recent gains in the currency and also beaten by persistent fears about the fiscal health of the eurozone.
The dollar rose above 93 yen for the first time since early January, after the strong consumer confidence data would support the idea that the Fed will raise rates sooner than their counterparts in Japan or Europe.
The greenback closed its operations in New York up 0.4 percent at 92.82 yen.
"The U.S. economy continues to improve, while Japan remains in deflation, and the performance of 10-year note hovering around 4 percent, the interest rate differentials are driving the dollar higher," said Hidetoshi Yanagihara, senior currency strategist with Mizuho Corporate Bank in New York.
As stated, the dollar could reach 95 yen in the second quarter.
The pound had its best daily performance against the dollar in nearly two weeks, after which a review of British GDP showed the economy grew 0.4 percent in the fourth quarter of 2009. A separate report also showed that house prices in Britain rose in March.
At the closing of the transactions in New York, the pound rose 0.6 percent to $ 1.5062, while the euro traded at 89.02 pence, losing 1.0 percent on the day.
Against the dollar, the euro fell 0.6 percent to $ 1.3416 and lost 0.5 percent against the yen at 124.48 points. At the start of operations, the European currency rose to 125.44 yen, its highest level since early February.
Analysts say that if the report on nonfarm payrolls in the United States to be published on Friday shows that the economy created jobs in March, could push the dollar further, cementing expectations that the Fed will raise interest rates later in year.
After advancing for two consecutive days after the agreement last week between the European Union and the International Monetary Fund to help Greece, the euro lost momentum Tuesday.
Although Greece sold 5,000 million in bonds to seven years on Monday, the yield spreads between bonds Greek and German reference notes were extended on Tuesday, suggesting that investors remain fearful.
Greece plans to reopen a 20-year bond was added to fears about its funding needs, while the news that the Irish state will have a higher than planned in its banking sector raised fears in the market, limiting the progress of the euro.
"The agreement last week to say that is unlikely to see a cessation of debt payments in Greece, but that does not mean we will not have concerns about the ability of Greece or other countries of the periphery of the euro zone finance its deficit, "said Michael Malpede, Easy Forex analyst in Chicago.
(Reporting by Vivianne Rodrigues)
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