LONDON (AFX) - The dollar was struggling in early trade on continuing fears about the state of US equities ahead of Federal Reserve governor Alan Greenspan's evidence to the US Senate tomorrow, dealers said. While the euro is making another attempt toward parity with the dollar, the yen has hit a ten-month high against the dollar, despite a lower than expected current account surplus in Japan. Japanese finance minister Masajuro Shiokawa suggested that dollar/yen in the 125-130 range would be good for the Japanese economy, but warned that a fall to 115 would be problematic. "We suggest that the intervention risk has markedly increased," said BNP Paribas' global head of forex strategy Hans Redeker. Most market attention this week will focus on tomorrow's testimony from Greenspan. "This will be crucial for the overall market sentiment and therefore the direction of the dollar," said Michael Klawitter, currency strategist at WestLB. "While a break of parity ahead of Greenspan's speech is rather unlikely, the general upward trend in euro/dollar remains intact," he added. "As in the week's before, euro/dollar should remain very much a dollar story." However, BNP Paribas' Redeker noted that there are some corporate developments that are euro positive. There are reports Deutsche Telekom will sell US assets to reduce debt, while Deutsche Bank is said to be considering writing off 9 bln eur as it re-values its US acquisitions. "Although not having a direct currency impact, it provides another indication that European corporates aggressive acquisitions in the late 90s have not paid off, suggesting foreign direct investment is now staying euro positive," he said. Meanwhile, sterling remained rangebound ahead of Chancellor Gordon Brown's comprehensive spending review, which is poised to massively increase government spending. "Given the Treasury's optimistic economic growth forecasts, market participants will be worried about the risks of rising budget deficits," said WestLB's Klawitter. "Euro/sterling is likely to edge higher, supported by the upward pressure on euro/dollar."