LONDON (AFP) - The European single currency surged to an all-time high above 1.60 dollars on Tuesday on mounting investor fears about the stormy US economic outlook, dealers said. In late morning London deals, the euro jumped to 1.6038 dollars, which beat the previous all-time peak of 1.6019 that was set on April 22. It later stood at 1.6026, up from 1.5909 in New York late on Monday. Against the yen, the dollar fell to 105.01 yen from 106.18. The dollar tumbled to a historic low point against the euro ahead of Congressional testimony by Federal Reserve Chairman Ben Bernanke on the outlook for the US economy later on Tuesday. "We believe the dollar is in a very vulnerable position at present and a softening in rhetoric from Bernanke is likely to trigger a new wave of dollar selling," said economist Derek Halpenny at The Bank of Tokyo-Mitsubishi UFJ. "The trouble is the market is still very unclear over the details of support for Fannie Mae and Freddie Mac." World equity markets fell heavily again on Tuesday on scepticism that a dramatic US government rescue of the two mortgage giants had put a stop to a financial crisis, dealers said. European equities sank lower after more steep losses on Wall Street and earlier in Asia, despite a US rescue on Sunday to increase credit lines for Fannie Mae and Freddie Mac, and amid the failure of IndyMac bank in California. "Given the ongoing turmoil " and let's not forget IndyMac, the third largest bank failure in US history " the ability of Chairman Bernanke to 'talk up' the dollar will be very limited today (Tuesday)," Halpenny added. "Indeed, any attempt to do just that today could prove counter-productive." Investors were also waiting nervously for earnings results due this week from US banks. Major banks have been hit by worries about their exposure to debt securities issued by Fannie Mae and Freddie Mac. "Traders continue to fall out of favour with the dollar, looking for safer currencies instead," added CMC Markets analyst James Hughes. Elsewhere, sterling climbed above the 2.0-dollar mark on Tuesday after official news that British 12-month inflation jumped to a 16-year high point of 3.8 percent in June, owing to big rises in food and fuel prices. That marked the highest level since May 1992 and compared with a 12-month rate of 3.3 percent in May, the Office of National Statistics said. In the eurozone, dealers absorbed news that German investor confidence plunged to a record low point in July, falling below economists' forecasts as high oil prices and a rising euro hit Europe's biggest economy, according to a widely watched survey. The ZEW research institute said Tuesday that its indicator of economic sentiment fell 11.5 points to minus 63.9 points, the lowest level since its survey began in December 1991. The previous low was 62.2 points, hit during a recession in December 1992, a ZEW spokesman told AFP. In London trading on Tuesday morning, the euro changed hands at 1.6026 dollars against 1.5909 late on Monday, at 168.25 yen (168.93), 0.7964 pounds (0.7973) and 1.6082 Swiss francs (1.6163). The dollar stood at 105.01 yen (106.18) and 1.0036 Swiss francs (1.0160). The pound was at 2.0117 dollars (1.9947).