The euro extended losses against the dollar on Tuesday as U.S. stocks turned negative after Federal Reserve Chairman Ben Bernanke said more must be done to secure financial market stability.

Euro buying hit a session low of $1.2522 , according to Reuters data, after earlier rising as high as $1.2677. It was last changing hands at $1.2542, down 0.3 percent on the day.

Bernanke told Congress the government must take bold action to fight the crisis even if it means a rise in government debt. Some analysts said that was good for the dollar buyers because it suggested U.S. authorities would do whatever it takes to help the economy recover.

A weak U.S. housing report and Bernanke's warning that the near-term economic prospects remain uncertain, also dulled risk-taking, prompting investors to move away from stocks and other currencies and toward the relative safety of the dollar.

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