NEW YORK : The US dollar faced fresh pressure on Wednesday amid weaker-than-expected US economic news combined with a strong German business survey and hawkish comments from the European Central Bank.

The euro vaulted to 1.5845 dollars at 2100 GMT, up from 1.5647 dollars in late New York deals on Tuesday, approaching its all-time high of 1.5905 dollars on March 17.

The dollar was quoted at 99.11 yen, down from 99.98 yen.

The greenback was hit by figures showing that US durable goods fell 1.7 percent in February, contrary to forecasts for a gain of 0.7 percent, while new home sales were down 1.8 percent.

"The durable goods negative surprise came at a particularly vulnerable time for the dollar, following hawkish comments by (ECB chief Jean-Claude) Trichet and a stronger-than-expected German IFO survey," said Michael Woolfolk, currency strategist at Bank of New York Mellon.

"With sentiment turning back against the dollar, the rally appears to have been cut short with (sellers) looking for fresh catalysts to drive the dollar back towards new lows," he said.

Germany's Ifo institute business climate index climbed to 104.8 points in March from February's 104.1, confounding analyst expectations for a fall to 103.4 points.

Meanwhile Trichet, speaking to the European Parliament, reinforced his message that eurozone interest rates will remain on hold while inflation is a risk. The comments dispelled any notion of an early rate cut from the ECB.

"Trichet continues to remain hawkish, noting that the ECB's primary concern is inflation, adding that price stability 'is the only needle in our compass,'" said Jordan Eburne at PNC Bank.

"Trichet helped allay speculation of a rate cut ... The short term for the euro appears quite bullish, as there were no new warnings regarding the strength of the euro."

Economists had been expecting the US economic slowdown and turmoil on the financial markets to have weighed on confidence in the eurozone's largest economy but the Ifo reading suggested strong underlying resilience.

Dealers said the US home sales figures were slightly better than expected but this was not enough to stem the tide against the dollar.

In late US trade, the dollar stood at 0.9891 Swiss francs from 1.0049 on Tuesday.

The pound was at 2.0081 dollars after 2.0062. - AFP/de