London (AFP) - The dollar weakened slightly against major rivals Tuesday, helping the pound to rebound from a record low, while equity markets stabilised after recent volatility.
The world is heading towards a global recession as multiple crises collide, World Trade Organization's chief Ngozi Okonjo-Iweala told the global trade body's annual public forum in Geneva.
Recession prospects have risen in recent weeks as central banks keep hiking interest rates to try and cool decades-high inflation, boosting in particular the dollar.
The Federal Reserve has carried out three successive bumper US hikes and is warning of more to come.
That has seen investors pile into the dollar, sending it to record or multi-decade peaks, in turn rattling governments from Tokyo to Beijing and London.
On Monday, the pound hit an all-time low at $1.0350, with traders spooked by a UK tax giveaway they warned could further fuel inflation and significantly ramp up British state borrowing.
"Dollar strength remains the driving force -- or wrecking ball -- in financial markets at the moment," said Markets.com analyst Neil Wilson.
Sterling staged a small recovery Tuesday after the Bank of England said it would "not hesitate to change interest rates by as much as needed".
With the pound showing record weakness against the dollar this week, analysts are forecasting a big rate increase when the BoE holds its next regular policy meeting on November 3.
"A rate hike of over 150 basis points is currently priced in for the coming meeting," Commerzbank analyst Esther Reichelt noted Tuesday, questioning if that would even be enough.
The Bank of England's statement "is unlikely to calm all those who had already questioned the BoE's determination to fight inflation even prior to these events", she added.
Elsewhere, European natural gas prices surged nearly ten percent to 190.50 euros following news that the two Nord Stream gas pipelines linking Russia and Europe have been hit by unexplained leaks, raising suspicions of sabotage.
The pipelines have been at the centre of geopolitical tensions in recent months as Russia cut gas supplies to Europe in suspected retaliation against Western sanctions following its invasion of Ukraine.
A major new pipeline that will bring in Norwegian gas via Denmark was inaugurated in Poland on Tuesday in a move aimed at helping strengthen Europe's energy security.
Oil prices jumped almost two percent, helped by a weaker dollar.
Key figures at around 1100 GMT
London - FTSE 100: DOWN 0.1 percent at 7,016.35 points
Frankfurt - DAX: UP 0.7 percent at 12,315.34
Paris - CAC 40: UP 0.7 percent at 5,811.35
EURO STOXX 50: UP 0.7 percent at 3,367.42
Tokyo - Nikkei 225: UP 0.5 percent at 26,571.87 (close)
Hong Kong - Hang Seng Index: FLAT at 17,860.31 (close)
Shanghai - Composite: UP 1.4 percent at 3,093.86 (close)
New York - Dow: DOWN 1.1 percent at 29,260.81 (close)
Pound/dollar: UP at $1.0821 from $1.0689 on Monday
Euro/dollar: UP at $0.9642 from $0.9611
Euro/pound: DOWN at 89.11 pence from 89.87 pence
Dollar/yen: DOWN at 144.28 yen from 144.72 yen
Brent North Sea crude: UP 1.7 percent at $85.47 per barrel
West Texas Intermediate: UP 1.9 percent at $78.11 per barrel
