FOREX-Dollar up against euro on policy outlook, strong data

* Traders expect Fed to pull back on stimulus

* Euro down against dollar in wake of ECB comments

* Calming of Ukraine tension aids emerging market currencies

(Updates prices, adds analyst comments, changes byline, dateline, previous LONDON)

NEW YORK, March 26 (Reuters) - The dollar rose against major currencies on Wednesday on strong U.S. economic data and conviction that the U.S. Federal Reserve will cut back its stimulus measures, but fell against emerging market currencies on a calming of fears surrounding Ukraine.

Expectations that the Fed will reduce monetary accommodation led investors to favor the dollar against the euro, which was hit Tuesday after European Central Bank policymakers hinted at a softening of monetary policy.

Investors had bought the dollar last week after Fed Chair Janet Yellen suggested the possibility of raising interest rates early next year.

"With the ECB leaning one way, and with the most recent FOMC and Janet Yellen comments leaning the other direction, the medium-term view is that the dollar will be stronger versus the euro," said Alan Ruskin, global head of G10 currency strategy at Deutsche Bank in New York.

European Central Bank governing council member and Bundesbank chief Jens Weidmann said Tuesday that negative interest rates were an option the bank could use to counter strong gains in the single currency.

The ECB holds a policy meeting next week, but before that traders will await euro zone "flash" inflation data on Monday. Another drop in price pressures could bolster expectations that the ECB may have to act soon.

Strong U.S. economic data underpinned the dollar's strength versus the euro and the yen on Wednesday. The Commerce Department said durable goods orders rose 2.2 percent in February as demand increased almost across the board, ending two consecutive months of declines.

Financial data firm Markit, meanwhile, said its "flash" composite Purchasing Managers Index (PMI), a weighted average of its manufacturing and services indexes, hit 55.8 in March, up from 54.1 in February.

The U.S. dollar index, which measures the dollar against six major currencies, was last up 0.16 percent at 80.072. The euro last traded down 0.24 percent against the dollar at $1.3793.

The dollar fell against emerging market currencies, however, in the wake of the West's decision to hold off on more economic sanctions on Russia, marking a calming of geopolitical tension in the Ukraine crisis.

The dollar was last down 0.86 percent against the Chilean peso at 554.07 pesos, and was down 0.57 percent against the Turkish lira at 2.197 lira. The dollar was last down 0.12 percent against Russia's rouble at 35.44 roubles.

The appetite for risk in emerging market currencies also weighed on the safe-haven yen. The dollar last traded up 0.1 percent against the yen at 102.355.

(Additional reporting by Anirban Nag in London; Editing by Peter Galloway)