The euro held steady last night against the US dollar as stock markets around the world began to stabilise.

Earlier today, the euro stood at 1.2642 USD - up from 1.2636 in New York yesterday, but slightly down on the figures earlier in Sydney, website Business World reports.

Norihiro Takemura, dealer at Sumitomo Trust and Banking, commented that there has been a recent shift of funds into assets dominated by the dollar as a result of turbulent global equities.

He said: "So the rebound in the global equity market, if sustained, will see dollar supply ease."

In the US, comments made by Ben Bernanke, the chairman of the Federal Reserve, helped to alleviate fears that rates would be increased.

He said that predictions regarding inflation "have remained within the ranges in which they have fluctuated in recent years".