Federal Reserve Chairman Ben Bernanke told a House panel Wednesday a top Fed priority is restoring financial calm even as "too high" inflation and weak growth threaten the economy.

The dollar rose against the euro and yen Wednesday, moving further from Tuesday's record low against the euro, on positive earnings news from Wells Fargo and lower oil prices.

Housing finance giants Fannie Mae and Freddie Mac have the potential to pose systemic risks to the financial system and need a stronger regulator, U.S. Treasury Secretary Henry Paulson said on Tuesday.

A weakening housing market, a strained banking system, and rising oil prices threaten the U.S. economy, and restoring financial market stability is a top priority, Fed Chairman Ben Bernanke said.

Soaring food and fuel prices pushed Britain's inflation rate to nearly double the central bank's 2 percent target in June, official data showed on Tuesday, boosting talk of interest rate hikes ahead.

Discussion of persistent financial market turmoil is seen as likely to overshadow the Federal Reserve's semi-annual monetary policy outlook when Fed Chairman Ben Bernanke testifies before Congress on Tuesday.

The Bank of Japan left interest rates on hold at 0.5% on Tuesday as expected but downgraded its growth forecasts, warning high energy costs are slowing the world's second largest economy.

Australia's central bank was growing more confident that interest rates were high enough to  retrain future inflation when it left rates unchanged at a 12-year high earlier this month, minutes of its July meeting showed on Tuesday.

The dollar rebounded from record lows versus the euro on Tuesday, supported by a sharp fall in crude oil prices and a rise in U.S. stocks.

The outlook for UK housing improved slightly in June, but a sharp downturn in the economy could see the foundations of the British real-estate market start to crumble, the Royal Institute of Chartered Surveyors said Tuesday.

An intervention to prop up the U.S. dollar is very likely if the greenback's slide continues, as U.S. policymakers' attitude towards a weak currency has shifted dramatically over the past year, a forex strategist tells CNBC Europe.

The dollar clambered back from a near-record low against the euro Monday after the United States announced an emergency plan to restore investor confidence in mortgage finance companies Fannie Mae and Freddie Mac.

The dollar slumped Friday, battered by heightened worries about the U.S. financial sector after a report said the U.S. government is considering taking over mortgage agencies Fannie Mae and Freddie Mac if their situation worsens.

The Dow chart looked like a yo-yo Thursday as traders pounded financials including Freddie Mac and Lehman Brothers and oil prices surged more than $5 a barrel. Still, all three major indexes eked out gains by the closing bell.

The Dow chart looked like a yo-yo Thursday as traders pounded financials including Freddie Mac and Lehman Brothers, overshadowing any positive news the market had to offer.