FOREX-Dollar gains as Bernanke soothes financial markets

* Dollar rallies after Bernanke comments

* Bernanke says may keep Fed's emergency lending open

* Mood in financial markets still cautious (Updates prices, adds comments, byline)

By Gertrude Chavez-Dreyfuss

NEW YORK, July 8 (Reuters) - The dollar rebounded on Tuesday after Federal Reserve Chairman Ben Bernanke said the U.S. central bank may keep an emergency lending facility open beyond the end of the year for big Wall Street firms

The U.S. currency struggled earlier, particularly against the yen, which gained broadly as global economic jitters weighed on world stock markets and stoked risk aversion.

Bernanke on Tuesday said the Fed was considering several options, including extending the duration of the central bank's facilities for primary dealers beyond year-end should the current unusual circumstances persist in the dealer funding markets. For details, see [nN08487125].

"What Bernanke's saying is helping Wall Street, and that's helping the dollar," said Boris Schlossberg, senior currency strategist at DailyFX.com in New York. "Everybody thinks the Fed's number one mandate is to fight inflation, but it's actually to make sure the banks are solid.

"What they're trying to do is avoid a panic on Wall Street, and in the near term that's dollar-positive," he added.