The Dollar was stronger on Tuesday as investors continue to seek for safety. But a late rally on Wall Street limited dollar gains against Euro and Sterling and boosted it against the Yen on hopes that financial market turmoil may be starting to ease. Market players remain prudent as the euro zone and Japan are already falling into recession in Q3 and US data are showing a sharp slide in home prices for Q3 and a record decline in producer prices last month.

In the last 5 months the Dollar has rallied as the US and global outlook has worsened, with investors pulling money out of commodities, stocks and high-yield currencies and returning into safe-haven assets such as US Treasuries. According to Treasury data released Tuesday, foreigners bought $143.4 billion of US securities in September, the largest net inflow since early 2006. Testifying before Congress on Tuesday, Federal Reserve Chairman Ben Bernanke said massive demand for the Dollar means it remains unrivaled as the world reserve currency.

UsdJpy traded 0.39% higher at 96.76, off its 97.41 session peak. EurUsd was unchanged at 1.2636 while GbpUsd lost 0.19% at 1.4958. EurJpy rose 0.34% at 122.27. GbpJpy was 0.2% higher at 144.74. UsdChf surged into new high at 1.2047 closing up 0.26% at 1.2019.

Fears about the future of US automakers also darkened investors' mood as Treasury Secretary Henry Paulson reiterated his opposition to diverting $25 billion from a $700 billion financial bailout program to rescue Detroit. Seeing General Motors, Ford Motor Co or Chrysler fail in the current environment "would not be a good thing," Paulson said during testimony before Congress, but added that the bailout package was meant for financial services firms. The big three carmakers have warned of dire consequences for the auto industry if one or more is forced to.