The euro and higher yielding currencies such as the Australian dollar gained against the U.S. dollar on Tuesday, lifted by improved appetite for risk as equities gained ground.

Volumes were very thin, however, and analysts were wary of drawing too many conclusions from current intraday movements, with the euro still trading within its recent range against the dollar, albeit at the top end.

Against the yen, the dollar stayed supported, hovering close to a two-month high on the view that the U.S. economy is recovering well, which has lifted U.S. Treasury yields.

Later in the session, investors will watch for U.S. consumer confidence for December at 1500 GMT and the Standard & Poor's/Case-Shiller home price index for October at 1400 GMT for further clues on how well the U.S. economy is faring. ECONUS >>

The dollar hit a three-month high against the euro on Thursday and was generally stronger across the board following a slightly more optimistic assessment about the U.S. economy from the Federal Reserve.

World stocks fell, with banks taking a hit at the prospect of less liquidity pumping from the U.S. central bank and others.

The Fed's policy-making committee left rates unchanged as expected on Wednesday but reminded markets it will let most of the special liquidity facilities, which have helped bolster the U.S. banking system after last year's credit crisis, expire by early next year>>