The Dollar fell on Tuesday as investors worried that a spike in oil prices to record highs could further slow the US economy and prompt the Federal Reserve to again cut interest rates.

The high-yielding Australian and New Zealand Dollars posted strong performances, after booking early gains as a rise in global equities and commodities bolstered investor appetite for risky trades. The Aussie rose to a three-month high versus the Dollar, after minutes from the Reserve Bank of Australia's February policy meeting confirmed expectations for more interest rate hikes, boosting the currency's appeal to global investors.

Expectations that the European Central Bank would keep its benchmark lending rate at 4% longer than previously anticipated pushed the Euro to a two-week peak 1.4757. AudUsd rose as high as 0.9237, a level last seen in early November. It last traded at 0.9160, up 0.53%.

Minutes from the RBA's Feb. 5 policy meeting showed the central bank had debated a more aggressive 50bp rate hike. While the RBA decided in the end on a modest 25bp rise in the cash rate to an 11-year high of 7%, the minutes pointed to further monetary tightening ahead. The New Zealand dollar followed the Aussie's rally, climbing to 0.8024, its highest level since July. It was last up 0.29% at 0.7986. EurUsd rose 0.53% at 1.4757, while UsdJpy was down 0.22% at 107.94.

Credit Suisse said it had written $2.85 billion off the value of its asset-backed investments, while Barclays, Britain's third largest bank, raised its 2007 write-down on the value of risky assets to £1.6 billion.

US consumer inflation and housing data await investors today and could fuel the debate on the prospects of stagflation in the world's largest economy. The Fed has lowered its benchmark overnight lending rate by 225bp to 3% since mid-September in a bid to stave off a recession following a sharp housing downturn.