* Market ignores Geithner comment on strong dollar
* Jump in U.S. home sales data boosts risk appetite
* Aussie at 8-month high vs dlr, sterling at 7-month peak (Updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, June 2 (Reuters) - The dollar dropped to fresh lows for the year against the euro on Tuesday, as strong U.S. housing sales data reinforced optimism about the health of the global economy, sapping safe-haven demand for the greenback.
Higher-yielding and commodity-linked currencies such as the Australian and New Zealand dollars gained against the U.S. dollar, benefiting from the equity markets' generally bullish tone in recent weeks.
The U.S. currency had recovered some of Monday's losses earlier in the global trading day, but those gains eroded as the New York session opened.
News that pending home sales posted their biggest jump in 7-1/2 years in April suggested the U.S. housing market was on the mend and rekindled the rally in higher-risk currencies. For more see [ID:nN02503338].
"The overall sentiment in the market remains dollar negative," said Vassili Serebriakov, senior currency strategist at Wells Fargo in New York.
"This whole story about a financial market recovery and stabilization of the global economy has encouraged people to take on more risk and buy commodity currencies essentially against the U.S. dollar."
In late afternoon trading, the dollar index fell to a low of 78.334 .DXY, its weakest level since mid-December. It last traded at 78.393, down 1.0 percent on the day.
The euro hit a 2009 high of $1.4332 <EUR=EBS> on electronic trading platform EBS. The euro last traded at $1.4320, up 1.1 percent on the day.
The Australian dollar jumped to an eight-month high of US$0.8232 <AUD=D4>, according to Reuters data, having fallen as low as US$0.8050. The Aussie was last at US$0.8210, up 1.4 percent from late on Monday.
STERLING, NEW ZEALAND DOLLAR WELL-BID
Sterling hit a seven-month high of $1.6595 <GBP=D4>, according to Reuters data, and last traded at $1.6589, up 0.9 percent on the day.
The New Zealand dollar also touched an eight-month high against its U.S. counterpart at US$0.6595 <NZD=D4>, according to Reuters data. By late afternoon, it was up 1.2 percent at US$0.6570.
Comments by Russian President Dmitry Medvedev on CNBC television earlier that the world needs a larger number of reserve currencies also weighed on the dollar. Analysts said the start of the dollar's slide in the morning coincided with his remarks.
Medvedev's statements, however, were nothing new. In May, he had suggested that the Russian ruble should be made the new global reserve currency. A repeat of these remarks has highlighted the dollar's vulnerability as the U.S. government tries to tackle an enormous fiscal deficit.
U.S. Treasury Secretary Timothy Geithner tried to assuage fears about the dollar in China on Tuesday, but markets largely disregarded his comments. He reiterated the U.S. government's strong dollar policy and sought to reassure China over its huge holdings of U.S. Treasury debt. [ID:nL2583776]
The dollar was last down 1.1 percent against the yen at 95.54 yen on EBS <JPY=EBS>.
Despite the overall bearish tone on the dollar, some analysts are concerned about the speed and extent of the dollar's fall in recent days.
"More and more talk has been circulating that the current dollar downtrend is becoming extreme," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey.
"While we still have no concrete technical indications of a reversal, we are becoming increasingly cautious on chasing the dollar lower and today's modest new highs versus yesterday's suggests the short dollar trade has become more crowded." (Additional reporting by Nick Olivari; Editing by Leslie Adler)