Currencies reversed day earlier selloffs Tuesday with a rise in global equities on stabilized risk appetite.
The dollar and euro also bounced back against the yen on the quarter-end in Japan Tuesday.
The dollar advanced to a three-week high of Y99.18, while the euro rose to its highest level yet this week, Y131.70 Tuesday.
The euro also earlier hit an intraday high of $1.3343, regaining Monday's losses.
Analysts cite quarter-end flows as the dominant factor moving markets as traders clear their positions. Tuesday's data gave no reason to support riskier investments otherwise.
Most recently, the Conference Board reported its March consumer confidence index remained relatively unchanged in March, at a reading of 26.0, after hitting an all-time low in February. Another report indicated business activity in the Chicago area deteriorated in March to the lowest level in about 29 years. Earlier, the S&P/Case-Shiller home-price indexes showed home prices continued their multiyear slide in January, as 14 of 20 major metropolitan areas posted price declines of more than 10% from a year earlier.
Tuesday afternoon in New York, the euro was at $1.3260 from $1.3190 late Monday. The dollar was at Y99.08 from Y97.26, according to EBS. The euro was at Y131.40 from Y128.30. The U.K. pound was at $1.4318 from $1.4250, and the dollar was at CHF1.1394 from CHF1.1489.
Commodity currencies also strengthened overnight, including the Norwegian krona, Australian dollar, New Zealand dollar and Canadian dollar.
Currency traders are also awaiting the outcomes of the European Central Bank monetary policy meeting and Group of 20 summit, both Thursday.
French President Nicolas Sarkozy has stepped up the rhetoric in the face of expectations that the G20 will offer little in terms of additional stimulus measures.
He said Tuesday the global financial crisis was "too serious for us to hold a summit for nothing."
Meanwhile, euro zone data released overnight indicated the ECB could cut interest rates this week.
The annual rate of inflation in the 16 countries that use the euro fell to its lowest level on record in March, 0.6% from 1.2% in February.
In Germany, the euro zone's largest economy, unemployment rose in March, a month when firms usually hire, for the first time since records began in 1928.
The Organization for Economic Cooperation and Development said Tuesday the euro zone economy has entered a deep recession and predicted a 4.1% contraction in gross domestic product this year. The OECD had forecast a contraction of 0.6% in November.
The OECD called for the ECB to cut interest rates quickly and start quantitative easing, a strategy of buying securities on the open market to boost money supply. The U.S. Federal Reserve and the Bank of England both have taken this step.
For the U.S., the OECD predicts the U.S. recession is likely to be much deeper than the White House expects, pushing the unemployment rate into double digits next year. It said more public cash infusions into big financial institutions will probably be needed.
Canada Morning
The Canadian dollar was stronger Tuesday in conjunction with overnight equity and commodity price gains, coupled with the global unwinding of Monday's safe haven bid for U.S. dollars.
There was minimal market reaction to early news of a 0.7% decline in Canada's January gross domestic product, a result that was in line with consensus forecasts.
Tuesday afternoon, the U.S. dollar was at C$1.2585 from C$1.2621 late Monday, and is expected to maintain its recent pattern of range trade between C$1.2450 and C$1.2600, according to a technical note from RBC Capital Markets.
