During early deals on Tuesday, the dollar declined against the euro and the Swiss franc as the European stock markets rebounded today after suffering sharp losses yesterday, reducing demand for the safe appeal of the US currency.

In initial trade, London's FTSE 100 index of leading shares rose 0.53 percent to 3,782.90 points. In Paris, the CAC 40 in Paris won back 0.56 percent to 2,734.69 points and in Frankfurt the DAX 30 climbed 0.46 percent to 4,007.66 points.

European stock markets had plummeted on Monday, with Frankfurt closing down 5.10 percent, as the US unveiled plans for a major shake-up for the ailing auto industry.

The dollar is also trading down as the crude oil prices rose above $49 barrel today. U.S. crude rose 84 cents to $49.25 a barrel by 6:02 am ET, having earlier climbed more than $1 to as high as $49.46. London Brent crude rose $1.09 to $49.08.

Oil's more than 9 percent rally in March has been prompted by rallying stock markets and lower oil supplies as the Organization of the Petroleum Exporting Countries cuts production.

The price is still down nearly $100 from the record high reached last year because the global economic crisis has eroded oil demand. Worldwide, demand is expected to contract in 2009 for a second consecutive year.

The S&P/Case-Shiller home price index, is scheduled to be released at 9 am ET. Economists expect an 18.5% year-over-year decline in the 20-city composite house price index for January.

The results of the National Association of Purchasing Management-Chicago's business survey for March are scheduled to be released at 9:45 am ET. Economists expect the business barometer index based on the survey, to be at 34.7.

At 10:00 am ET, the Conference Board is scheduled to release its consumer confidence report for March. The survey is expected to show that the consumer confidence index remained rise to 27 in March.

Philadelphia Federal Reserve Bank President Charles Plosser is scheduled to deliver a speech on regulatory reform to the University of Chicago Booth School of Business at 1 pm ET.

The dollar edged down against the Swiss franc, falling to a 4-day low of 1.1388 by about 6:10 am ET, and the next downside target level for the pair is seen around 1.12. The dollar-franc pair closed Monday's deals at 1.1486.

Focusing on economic report from Switzerland, the UBS said today that the Swiss UBS consumption indicator dropped to 0.89 in February from 0.92 last month. The indicator thus continued its downward trend and remained below its long-term average of 1.5 for the fifth consecutive month.

Against the common currency of Europe, the US currency dropped to a 4-day low of 1.3308 by about 6:15 am ET, compared to a 12-day high of 1.3116 hit yesterday. The dollar may likely target the 1.359 level against the euro, if it slides further. The euro-dollar pair closed Monday's deals at 1.3201.

Deals in the common currency pairs are likely to be influenced by the releases of economic reports such as French housing starts, Italian CPI and retail sales and the euro-zone March CPI estimate.

Against the UK currency, the dollar rebounded to 1.4255 by about 4:25 am ET, after falling to a 4-day low of 1.4341 during Asian session. The pound rose today during Asian trading as the consumer confidence in Great Britain came better than the analyst's expectations. Data consolidator GfK said that consumer confidence was higher for the second consecutive month in Great Britain, suggesting that measures to end the recession are starting to take hold. At yesterday's New York session close, the pound-dollar pair was quoted at 1.4269.

On the other hand, the dollar rallied against the yen during today's early trading as Japan's unemployment rate jumped to a 3-year high in February. Japan's seasonally adjusted unemployment rate came in at 4.4 percent in February, the Ministry of Health, Labor and Welfare said today, touching a three-year high. That was slightly higher that forecasts for a 4.3 percent increase after the 4.1 percent gain in January.

The dollar climbed to a 4-day high of 98.52 against the yen, compared to 97.27 hit late Monday in New York.

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