LONDON (AFX) - The dollar strengthened against European currencies in thin midday London trade ahead of US Federal Reserve chairman Alan Greenspan's speech to the Senate Budget Committee at 3.00 pm about the US economy, dealers said. Dealers said that while they expect Greenspan to make some positive comments about the US economy, they do not anticipate the testimony to have much market impact. Adrian Schmidt, economist at the Royal Bank of Scotland, said: "Euro/dollar is approaching the bottom of its range, and that may be what is dragging the other Europeans down." He added that the USD/CHF was still some way away from the top of its range and had some romm to catch up. But dealers saw little chance of the euro/dollar cross falling below the 0.8720 level. They said a decent outperformance of European equity markets over the US equity market should trigger some support. "Historically, there is about 75 pct corellation between equity market performances and euro/dollar," said Schmidt. "It is difficult to believe that if it continues, it won't provide some support for the euro, but for the moment it is hard to oppose dollar strength." He added: "We really need to see more positive European data and maybe some real money flows into European assets before the euro can start to benefit." Otherwise, dealers said a decline in US weekly jobless claims, due at 1.30 pm today, could prove supportive for the dollar. Karim Mir, chief dealer at Barclays Capital, said: "The move has really happened overnight and there hasn't been much fresh impetus since we came in. Maybe when the US come in we'll see them trying to push the dollar higher against Swiss (franc), euro and sterling." Equally, dealers saw a short-term base for the sterling/dollar cross at around the 1.4180 level. But sterling was mildly firmer accross the board as the EMU debate continues to make headlines. "We don't believe that we'll see a referendum (on the euro) this parliament but while the profile of the EMU conversion debate is in the news, it'll tend to underpin euro/sterling," said RBS's Schmidt. He predicts the outperforamce of the UK relative to the rest of the world economy is likely to diminish as the world recovers, partly due to the smaller and relatively uncompetitive manufacturing sector. "It's tending to suffer on the downside with sterling/dollar leading the way, while on the upside euro/sterling is leading the way. The British Chamber of Commerce quarterly economy survey contained no surprises and therefore failed to impact on the market, he added.