LONDON (AFP) - The dollar climbed Tuesday against major rival currencies before key testimony from US Federal Reserve Chairman Ben Bernanke, but buyers were on edge amid more bad economic and corporate news.
In morning London trade, the euro eased to 1.2620 dollars from 1.2645 dollars late in New York on Monday.
The dollar firmed to 96.51 yen from 96.35 yen on Monday.
Later on Tuesday, US Federal Reserve Chairman Ben Bernanke was expected to testify in Congress, alongside Treasury Secretary Henry Paulson.
"The main focus (for foreign exchange trade Tuesday) is likely to be the appearance by Fed Chairman Bernanke (and) Treasury Secretary Paulson... before the House Financial Services Committee on the government's implementation of the 700-billion-dollar financial rescue," said Barclays Capital analyst David Woo.
Market players were still digesting news that ailing bank Citigroup had on Monday decided to cut its global workforce by a huge 50,000 people, the latest sign of deteriorating world economic conditions.
World stock markets meanwhile slumped for a second day running on Tuesday as the prospect of a year of no growth in Japan raised concern about a sharp global economic slowdown, analysts said.
In late morning stock market trade across Europe, London was down 1.53 percent, Frankfurt shed 1.45 percent and Paris lost 1.50 percent in value.
Earlier, Tokyo had closed down 2.28 percent and Hong Kong tumbled 5.94 percent, after New York stocks had tumbled by about 2.50 percent overnight.
Meanwhile ahead of his speech, Paulson told The Wall Street Journal that he would not use the remainder of a 700-billion-dollar bailout package until the next administration took office in January.
"Markets have come to see that the current administration wants to roll over the financial crisis to the next administration," said Hachijuni Bank foreign exchange trader Sho Komamura.
"It has become clearer that the US government has no cohesive or decisive power, as seen in the confusion about helping General Motors. This is negative for the dollar, but this factor has already been priced in," he added.
Democrats in Congress launched a new push to use funds from the Wall Street rescue package to save the US auto industry, but the White House warned against draining money from a huge finance industry bailout.
Elsewhere on Tuesday, the British pound traded mixed on news that 12-month inflation fell more sharply than expected, to 4.5 percent in October, from a 16-year high of 5.2 percent in September, as oil prices dropped.
The euro changed hands at 1.2620 dollars against 1.2645 dollars late on Monday, at 121.57 yen (121.87), 0.8412 pounds (0.8440) and 1.5128 Swiss francs (1.5145).
The dollar stood at 96.51 yen (96.35) and 1.2011 Swiss francs (1.1977).
The pound was at 1.4972 dollars (1.4982).
On the London Bullion Market, the price of gold advanced to 736.80 dollars an ounce from 734 dollars late on Monday.
69.72 (0.62%)
