By Dion Rabouin
NEW YORK (Reuters) - A surprise drop in U.S. consumer confidence and concerns about rising global tension between Russia and Turkey pushed the dollar down on Tuesday as investors sought out safe-haven currencies.
The decline in consumer confidence, to its lowest since September 2014, accelerated moves out of the greenback despite positive data on the U.S. economy earlier in the day.
U.S. gross domestic product grew 2.1 percent in the third quarter, a healthier clip than initially thought, the government said.
The upward revision for GDP, one of the most important indicators of growth, could give the U.S. Federal Reserve the confidence to raise interest rates next month.
However, investors preferred the Japanese yen and Swiss franc on Tuesday, as they seemed more concerned with events in the Middle East, where Turkish forces shot down a Russian plane near the Syrian border.
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Tuesday's flows into the yen and franc were also likely driven by technical positioning, said Scott Smith, senior market analyst at Cambridge Global Payments in Toronto, who added that he expects to see heightened volatility and choppy trading this week, which will be shortened by the U.S. Thanksgiving holiday.
"I would take price action with almost a grain of salt, because it's not going to be indicative of overall trend," Smith said. "I could see some higher than normal volatility conditions as liquidity sort of dries up and people start going into the holiday weekend."
The dollar hit a session low against the Japanese yen after the GDP release, and was down 0.3 percent to 122.47 yen. The dollar touched a session low against the Swiss franc ahead of the GDP data's release, and was last down 0.3 percent to 1.0152 francs per dollar.
The euro added 0.1 percent against the greenback to $1.0661, buoyed by data from Germany that showed business sentiment in the euro zone's biggest economy was at its highest in more than a year, according to an IFO survey.
The dollar index , which measures the dollar against six other major world currencies, fell 0.2 percent to 99.599. It touched an eight-month high on Monday.
The dollar did rise against sterling on Tuesday after the Bank of England's chief economist, Andy Haldane, said there were downside risks to inflation and growth, while Governor Mark Carney reiterated a low interest rate environment is likely to persist. Earlier this month, he cooled expectations that the BoE will soon follow the Federal Reserve in raising rates.
The pound fell 0.3 percent against the dollar to $1.5079.
(Reporting by Dion Rabouin; Editing by Steve Orlofsky)