There are worries that pursuing the impeachment of Donald Trump could distract from Joe Biden's first few months in office and his push for new stimulus

London (AFP) - World markets were steady and the dollar rose against other major currencies Wednesday, with traders on edge ahead of a likely historic second impeachment of US President Donald Trump, dealers said.

Sentiment was capped also by worries about surging Covid-19 infections, which has caused several countries to reimpose lockdowns as they battle to roll out vaccines.

On Wall Street, the Dow was flat in midday trading.

Shares crept higher in Asia earlier with hopes for another vast US virus relief package largely offset by the political upheaval in Washington.

Oil prices slid while bitcoin rose.

“The impeachment of President Trump looked a long shot over the weekend – but if US press reports are to be believed, momentum appears to be building toward larger support within the Republican Party to impeach,” noted MUFG economist Derek Halpenny.

“The shift is being fuelled by more violent footage of the attack on Capitol Hill last week – with matters made worse by Trump’s lack of remorse.”

Democrats are pushing ahead with impeachment proceedings against Trump, who is accused of inciting last week’s storming of the Capitol Building.

In response, Trump has warned of “tremendous anger” across the country, while there are concerns of further unrest ahead of Joe Biden’s January 20 inauguration.

Trump’s second impeachment could overshadow Biden’s first few months in office and distract from his goal of pushing through a third rescue package for the US economy that he has said would be worth trillions of dollars.

“A lot changes in a week and that timeframe has taken Donald Trump from hoping to overturn his election loss – to merely hoping he can remain in the White House for another week,” said IG analyst Joshua Mahony.

In London, the British pound rallied as high as $1.3701, close to a 2.5-year peak, after Bank of England governor Andrew Bailey distanced himself from the idea of negative interest rates – but he still warned Britain faced its “darkest hour” due to the virus fallout.

The Bank of England last year slashed its key interest rate to a record-low 0.1 percent as it sought to counter the impact from the coronavirus pandemic, sparking speculation it could even move into negative territory.

- Key figures around 1645 GMT -

EURO STOXX 50: UP 0.2 percent at 3,618.82 points

New York - Dow: FLAT at 31,072.34

London - FTSE 100: DOWN 0.1 percent at 6,745.52 (close)

Frankfurt - DAX 30: UP 0.1 percent at 13,939.71 (close)

Paris - CAC 40: UP 0.2 percent at 5,662.67 (close)

Tokyo - Nikkei 225: UP 1.0 percent at 28,456.59 (close)

Hong Kong - Hang Seng: DOWN 0.2 percent at 28,235.60 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,598.65 (close)

Euro/dollar: DOWN at $1.2162 from $1.2207 at 2200 GMT

Dollar/yen: UP at 103.91 from 103.76 yen

Pound/dollar: DOWN at $1.3632 from $1.3664

Euro/pound: DOWN at 89.22 pence from 89.34 pence

West Texas Intermediate: DOWN less than 0.1 percent at $53.18 per barrel

Brent North Sea crude: DOWN 0.5 percent at $56.32 per barrel