The US dollar made slight gains but was still confined within narrow ranges in afternoon trading here, with the outlook for interest rates now in favor of the euro instead of the greenback, dealers said. Although the dollar registered some small gains during the course of the Asian session, its progress was continuously hampered by demand for the euro, they said. The dollar was at 115.10 yen, up from 114.98 yen nearly four hours earlier in Tokyo. The euro was at 1.2419 usd, down from 1.2422 usd in Tokyo. Since late yesterday, the euro has been supported by a strong German IFO report and by comments by members of the European Central Bank (ECB) that increases in interest rates in the euro-zone could speed up. Markets participants are now starting to speculate about whether the ECB will raise interest rates next month instead of in June, even though earlier this month ECB president Jean-Claude Trichet, in effect, ruled this out. With US Federal Reserve chairman Ben Bernanke scheduled to testify before Congress about the US economic outlook, market participants have become increasingly nervous, dealers said. "If he signals that the Fed is close to the end of its cycle, then the greenback will fall sharply further," UBS AG's global foreign exchange strategist, Mansoor Mohi-uddin, said in a daily advisory note. "Supported by technical momentum, rate expectations and improving growth prospects, the bias remains for euro-dollar to push higher into the 1.2450-1.2500 usd territory," an analyst at United Overseas Bank wrote. Looking ahead, the dollar might get an additional lift from US data due to be released later today, particularly the figures for sales of new homes, which will follow better-than-expected numbers for sales of existing homes, released overnight. But dealers said that it remains unclear whether even strong home sales numbers will be sufficient to keep the dollar buoyed up against the rising trend of the euro.