* Dollar rises vs euro after U.S. consumer confidence data
* Moves exacerbated by month-end, quarter-end flows
* VIX index returns to pre-Lehman Brothers levels (Adds comments, details. Updates prices)
By Vivianne Rodrigues
NEW YORK, June 30 (Reuters) - The dollar rose versus the euro on Tuesday amid renewed risk aversion after a report showed an unexpected drop in U.S. consumer confidence in June.
The weak confidence report sent U.S. stocks lower and put a halt to an early sell-off in the greenback. Analysts also said the simultaneous end to the month, quarter and half-year led to increased volatility in foreign exchange trading, exacerbating intraday moves in currencies.
The decline in consumer confidence "was a big shocker," said Kathy Lien, a director for currency research at GFT Forex in New York. "The weaker confidence number should help the dollar recovery for the rest of the day."
The Conference Board's U.S. consumer confidence index fell in June to 49.3 from a downwardly revised 54.8 in May, the private business research group reported on Tuesday. Economists polled by Reuters had forecast a reading of 55.0.
The confidence index followed a report showing a smaller-than-expected dip in U.S. home prices in April and a report on business activity in the U.S. Midwest.
In midday trading in New York, the euro was last down 0.4 percent at $1.4010 after trading as high as $1.4152 earlier, according to Reuters data.
Despite Tuesday's gains versus the euro, the dollar was still on track for its first quarterly decline against the single currency since the first quarter of 2008.
At the same time, an index measuring the value of the greenback against a basket of major currencies declined about 6 percent for the quarter, its first quarterly drop since the first three months of 2008. The index was last up 0.5 percent at 80.235.
"The greenback has clearly become oversold," said Michael Woolfolk, senior currency strategist at The Bank of New York Mellon, in New York. "It appears that the consumer confidence report provided players with an opportunity to take profit on short dollar-positions."
UPBEAT VIEWS
Investors have sold U.S. dollars recently as stock markets and oil prices rose on an upbeat view for prospects of a global economic recovery and hurt demand for the greenback as a safe haven.
The MSCI global stocks index was on course for its best quarter since its launch in 1988, up 20.9 percent at current prices, while oil earlier hit an eight-month high of $73.38 a barrel.
"The second quarter was great for stocks and there have been signs things are getting better in the financial system," said Meg Browne, a currency strategist at Brown Brothers Harriman in New York. "Altogether, this is encouraging news and the reaction to the positive outlook in the markets has been to sell the dollar and buy foreign currencies."
Some currencies, such as the Australian dollar, soared during the second quarter. The Australian dollar gained 16.5 percent versus the U.S. dollar in the past three months, its best quarterly performance since it became freely floated in 1983. The Australian dollar was last down 0.1 percent at $0.8058.
The expectation of global economic improvement gained support from the CBOE Volatility Index, Wall Street's so-called fear gauge, which dipped to its lowest level since just before Lehman Brothers collapsed last September.
"The move back in the Vix levels pre-Lehman is a result, a by-product of the overall improvement in outlook," Browne said. (Editing by Leslie Adler)