The dollar remained under heavy pressure versus other major currencies Tuesday morning in New York as traders continued to flee from the safehaven of the world's reserve currency in favor of its higher-yielding counterparts.

While the economic calendar remains relatively light on Tuesday, trading could be impacted by the release of the Commerce Department's report on the U.S. trade deficit in the month of March. The deficit is expected to widen to $29.0 billion from $26.0 billion in February.

The Federal Reserve is encouraged by early signs of the ability of major banks to raise new capital in the aftermath of recently performed stress tests, Federal Reserve Chairman Ben Bernanke said Monday evening.

The dollar dropped to a new 7-week low of 1.3695 versus the euro Tuesday morning, extending a 2-week downtrend coincidence with a rally in equities.

Its been a brutal stretch of late for the dollar against the sterling, as fears about the collapse of the UK banking system have waned and oil prices have risen. The dollar dropped to a new 4-month low of 1.5325 Tuesday morning. A move to 1.5376 would bring the dollar to its lowest since last December.

The tentative signs of a pick-up in the UK housing activity became more broadly based over the last month, a survey from the Royal Institution of Chartered Surveyors or RICS showed Tuesday.

The dollar fell to a 2-week low of 97 versus yen, having failed to crack the century mark last week.

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