(Updated in New York morning time)

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US consumer confidence weakens in March

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Euro boosted by rising German business morale

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Traders remain cautious on Trump's trade tariffs

By Karen Brettell

NEW YORK, March 25 (Reuters) - The dollar weakened

against the euro and yen on Tuesday as uncertainty around

President Donald Trump's planned tariffs kept traders cautious,

following a rally in the U.S. currency a day earlier on optimism

that he will be flexible in applying the import levies.

"The world's trading a little bit more risk-off today after

a risk-forward day yesterday," said Helen Given, FX trader at

Monex USA, noting that Monday's move "wasn't really based on

very much except for headlines."

Trump said on Monday that not all of his threatened levies

would be imposed on April 2 and some countries might get breaks.

The dollar has weakened on fears that tariffs will slow the

U.S. economy and also reignite inflation. Rising optimism that

the tariffs won't be as bad as feared, however, has helped the

greenback stabilize in the past few weeks.

A

stronger-than-expected

services component in S&P Global's flash U.S. PMI figures

on Monday also helped to offset concerns that the U.S. economy

is facing a near-term contraction.

Currency moves were relatively muted after data on Tuesday

showed that U.S. consumer confidence dropped for a

fourth straight month

in March, with households the most pessimistic about the

future in 12 years.

The euro, meanwhile, was boosted earlier by a survey

showing that German business morale

rose in March

as companies expect a recovery after two years of

contraction in Europe's largest economy.

The euro was last up 0.12% on the day at $1.0813. It

earlier fell to $1.0774, the lowest level since March 6.

The dollar fell 0.64% to 149.73 Japanese yen. It

earlier reached a three-week high of 150.94.

The U.S. currency will likely be boosted by month-end and

quarter-end rebalancing later this week and on Monday.

"The biggest flow dynamic that we see right now is a little

bit of a turnaround from the decidedly USD-negative first

quarter that we saw as people start to pare off those positions

into month-end and quarter-end," Given said.

Commodity Futures Trading Commission data on Friday showed

speculators turned net bearish on the U.S. currency last week

for the first time since October.

The Australian dollar climbed after the country's

government launched fresh tax cuts on Tuesday and announced

other cost-of-living relief in a major push to win back

disgruntled voters. It was last up 0.45% at $0.6313.

Sterling edged up 0.21% to $1.2946 as traders looked

towards the release of the spring statement on Wednesday in

which British finance minister Rachel Reeves is expected to cut

government spending to meet fiscal rules.

British retailers reported the sharpest drop in sales

volumes in eight months in March and they expect to see

little improvement next month

, an industry survey showed on Tuesday.

Bitcoin rose 0.22% to $88,086.21. It reached $88,772 on

Monday, its highest price since March 7.