* Fed chief says continues to expect ultra low rates
* Housing data underscores fragility in U.S. economy
* Euro pares gains as S&P may downgrade Greece's rating
(Adds comments, details. Updates prices)
By Luciana Lopez and Vivianne Rodrigues

NEW YORK, Feb 24 (Reuters) - The U.S. dollar fell versus the euro and yen on Wednesday after comments by U.S. Federal Reserve chairman Ben Bernanke dampened speculation monetary policy tightening might be nearing.

An unexpected plunge in new U.S. home sales last month further dampened investor sentiment and reinforced the low rates outlook. Analysts said the housing figures, combined with a drop in a consumer confidence reading on Tuesday, underscore the fragility of economic recovery.

The (Federal Open Market Committee) continues to anticipate that economic conditions -- including low rates of resource utilization, subdued inflation trends, and stable inflation expectations -- are likely to warrant exceptionally low levels of the federal funds rate for an extended period, read Bernanke's prepared testimony to the House Financial Services Committee on Wednesday. For details see [ID:nN23238973]

Sales of newly built U.S. single-family homes unexpectedly fell to a record low in January, dropping 11.2 percent. Analysts had expected the figure to gain over the previous month. [ID:nN24169849]

The weak housing numbers showed consumers are still struggling, said Vassili Serebriakov, currency strategist with Wells Fargo in New York.

All combined, there are not a lot of reasons to buy dollars today, he said. The initial reaction has been negative for the dollar.

The dollar fell 0.2 percent to 90.10 yen as Bernanke's comments subdued hopes U.S. interest rates would rise sooner rather than later -- a move that would boost the value of dollar-based assets.

The euro rose as high as $1.3626 earlier but last traded at $1.3550, up about 0.3 percent.

The single currency pared some of its gains after Standard and Poor's said it may downgrade Greece's BBB+ rating by one or two notches within a month, citing downside risks to growth that could hinder the country's deficit-cutting plan. [ID:nLDE61N2KL]

The euro fell to a nine-month low of $1.3442 last week on concerns about Greece's public finances. A ratings downgrade of Greece's four largest banks by Fitch on Tuesday reminded investors of the financial woes facing the country.

Recent data showing German consumer sentiment was set to decline in March also added to negative euro sentiment, as did a weak German business sentiment Tuesday. [ID:nBAF003980]

In the United States, the focus of investors may now turn to economic reports on durable goods, weekly jobless claims and upcoming fourth-quarter GDP data.

Analysts at Macroeconomic Advisers said in a note the unexpected decline in new home sales in January suggests lower first quarter sales and broker commissions than previously expected. The firm's tracking forecast of GDP growth in the first quarter is at 3.1 percent.

Elsewhere, sterling was little changed at $1.5412 after having tumbled on Tuesday when the Bank of England left the door open to more emergency measures and issued a downbeat economic outlook.

(Additional reporting by Steven C. Johnson and Naomi Tajitsu in London)