LONDON (ShareCast) - The greenback rallied to a one-month high against the euro as oil prices fell sharply and traders cheered upbeat US consumer confidence data.

A rally on Wall Street also buoyed dollar demand while investors mostly shrugged off downbeat US housing data released before the confidence report.

The Conference Board report showed US consumer confidence rose in July to 51.9 from June’s revised reading of 51.0.

The dollar has been gaining momentum in recent weeks as oil prices retreat on concern about dwindling demand.

Analysts said Merrill Lynch’s announcement late Monday of yet more home loan write-downs also helped the dollar, with hopes that it may also mark the settling down of the recent credit crisis.

Sterling was under pressure Tuesday after the market was hit by more gloomy economic data in retail sales and mortgage lending. Both reports showed hefty declines, outlining an overall weakness in the UK economy.

The euro was sent lower on concern about weak euro-zone economic data and fresh worries about the financial sector, analysts said.

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