LONDON, Jan 28: The dollar perked up on Tuesday a day after heightened geopolitical tensions sent shares plummeting and the US unit reeling to fresh multi-year lows against a range of other leading currencies.

The single European currency fell to $1.0794 from 1.0817 in New York late on Monday, when the euro had topped $1.09 briefly for the first time for almost four years.

The dollar rose to 118.56 yen from 118.40 on Monday.

There are tentative signs the dollar could pick up but it’s still very early days, said GNI analyst Mark Henry.

For this rally to go much further we’re going to need to see slightly softer rhetoric from US President George W. Bush this afternoon, he added.

Traders were waiting for Bush to make his annual State of the Union address in which he was expected to deliver his initial reaction to a closely watched report by UN weapons inspectors on Iraq given on Monday.

ABN Amro analysts said that although Bush might stop short of issuing an ultimatum to Baghdad, the possiblity that he would ratchet up the pressure presented a clear risk to the US unit.

And HSBC analysts said that although it appeared unlikely Washington would be in a position to launch an attack on Iraq for some weeks yet, the likelihood was that the dollar would continue to slide in the meantime. We believe an extension of the process will only prolong the dollar-negative period of uncertainty and political wrangling, they said.

Only the removal of Iraqi President Saddam Hussein forcibly or otherwise will put the conditions in place for a meaningful challenge to the weaker dollar trend, the HSBC analysts added.

Others said the market would also be poring over remarks from US Treasury Secretary-elect John Snow who was due to attend a confirmation hearing at the US Senate later Tuesday.

The euro was changing hands at 1.0794 dollars from 1.0854 late on Monday in New York, 128.22 yen (128.51), 0.6615 pounds (0.6632) and 1.4684 Swiss francs (1.4683).

The dollar was being quoted at 118.56 yen (118.40) and 1.3577 Swiss francs (1.3528).

The pound was at 1.6344 dollars (1.6364), 193.78 yen (193.74) and 2.2191 Swiss francs (2.2137).

On the London Bullion Market, the price of an ounce of gold climbed to $367.15 from 366 late on Monday. —AFP