The dollar slipped against the euro and yen in Tuesday trading following disappointing trade data, but activity remained limited ahead of a major address on the US economy.

The dollar was valued at $1.3031 from $1.2966 late on Monday and at ¥121.22 from ¥121.89, while the pound traded at $1.9459 from $1.9477.

Chairman of the Federal Reserve Ben Bernanke is scheduled to begin delivering two days of testimony on the state of the US economy to a congressional committee later today.

The euro would have gained further against the dollar following strong economic figures yesterday had traders not been waiting for Mr Bernanke's testimony, said analysts.

The dollar will gain "if he says anything more upbeat about the US economy or reaffirms the Fed's concerns about inflation", Matthew Strauss of RBC Capital Markets told the International Herald Tribune.

In London, sterling slipped somewhat against other currencies following January figures showing that inflation fell to 2.7 per cent over the month.