Dollar consolidates in London

The dollar attempted to consolidate on Tuesday, after a hefty fell against the euro the session before, despite jitters over the US government's bailout plan aimed at restoring its battered financial sector.
Weak eurozone data and a fall in crude oil prices also aided the dollar, but gains were hampered by concerns about how quickly US authorities can hammer out its planned $700 billion bailout plan, as well as the costs to the US economy.
In prepared testimony obtained by Reuters, US Treasury Secretary Henry Paulson urged lawmakers not to slow the bailout bill with unrelated provisions.
"The focus does remain on the uncertainty surrounding the US bailout package, the details of it and how exactly the final version will look," said David Powell, G10 FX strategist at Bank of America.
"The recent developments in the US suggest the debating process will be longer than expected." At 1127 GMT, the euro was down 0.1 percent at $1.4770 after hitting session lows below $1.47. It rose to a one-month high of $1.4867 on Monday when the currency staged its biggest one-day gain since its inception in January 1999.
The US currency steadied against a basket of currencies, to stand flat on the day at 76.256. Against the yen, the dollar was flat at 105.42 after hitting a session high of 105.90 yen. Liquidity was thin with Tokyo markets closed for a national holiday, which sharpened moves and increased volatility. Uncertainty over the bailout plan prompted European shares to tumble following steep overnight losses on Wall Street.
US authorities are racing to secure the plan before another major financial crisis erupts. All eyes will be Paulson and Federal Reserve Chairman Ben Bernanke as they answer questions from the Senate Banking Committee at 1330 GMT.
While problems in the United States were the main focus, weakness in the euro zone's manufacturing sector briefly drove the euro to session lows.
Euro zone manufacturing activity fell to a near seven-year low of 45.3 from August's 47.6, considerably below the 47.2 forecast. "People have been looking at the PMI out of the eurozone and have been flip flopping (over) what has been the worst story - is it the US, is it the eurozone," said Chris Turner, head of FX strategy at ING.
The dollar was also supported as crude oil prices retreated. US crude for November fell $1.31 to $108 05 a barrel after rising nearly $7 barrel on Monday. But the focus quickly turned back to the overriding concern about the global financial system and the US bailout plan, with the dollar expected to remain under pressure until further clarity emerges.
"The focus still remains on the greater issue of financial turbulence and what the resolution being worked on the US at this stage will do to resolve that," Bank of America's Powell said.