* Dollar falls as Bernanke's reappointment lifts stocks
* Case-Shiller report shows improving U.S. housing sector
* U.S. consumer confidence rises in August (Updates prices, adds comment)
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 25 (Reuters) - The dollar weakened on Tuesday as generally upbeat U.S. economic data and Federal Reserve Chairman Ben Bernanke's reappointment encouraged investors to take on riskier trades.
President Barack Obama on Tuesday renominated Bernanke to a second term as Fed chairman as the U.S. economy attempts to come out of the worst recession since the Great Depression. That provided a catalyst for stocks to rally, benefiting currencies perceived to be higher risk such as the euro.
In addition, reports showing a rise in U.S. consumer confidence and an increase in prices of U.S. single-family homes for a second consecutive month in June also improved risk sentiment.
"These numbers are definitely reassuring, though I'm more focused on the housing data. Still, the consumer confidence is like gravy today," said Melvin Harris, market strategist at Advanced Currency Markets in New York.
"We're not in a full-blown recovery mode yet, but we are seeing more normalized markets. Consumer numbers are important -- they are an indicator of what people are willing to spend and that matters for GDP growth."
The yen also drifted up against the dollar, but it came off its highs for the day amid a run of positive U.S. data. The Japanese currency and the dollar tend to fall when risk appetite improves.
Alan Ruskin, chief international strategist at RBS Global Banking and Markets, said Tuesday's data is moving in the right direction, although there is nothing in the reports to suggest that the recovery for the U.S. consumer "would be anything but tepid."
But he added that these reports, along with higher equities and an increasingly positive international environment "will keep the positive risk trade on track."
Meanwhile, the Bernanke story has been out for many hours, with the earlier news citing a senior Administration official. Currency markets, however, were slow to react as investors mainly took their cue from stocks.
Analysts said the delayed reaction was quite normal in thin summer trading conditions as financial markets struggled for direction.
"Clearly, Obama's decision (to reappoint Bernanke) has been motivated by a realization that ... global financial markets desperately need a sense of stability at a time when the banking system still remains vulnerable to further write-downs and credit contractions," said Boris Schlossberg, director of FX research at GFT in New York.
In midday New York trading, the euro rose 0.2 percent for the day to $1.4326, clawing back some losses after slipping to the day's low of $1.4254 according to Reuters data. It rose as high as $1.4361.
The euro showed little reaction to figures confirming Germany's economy grew 0.3 percent in the second quarter and exited a recession.
The ICE Futures' dollar index, a measure of the dollar's value against six major currencies, inched down 0.2 percent to 78.117.
The greenback traded at 94.27 yen, down 0.2 percent lower late on Monday.
Sterling, however, slipped versus the dollar, down 0.3 percent at $1.6365. (Additional reporting by Steven C. Johnson; Editing by Jan Paschal)