LONDON, Dec 19: The dollar on Wednesday nudged up against the euro while the pound slid below $2-mark for the first time in three months as the market monitored efforts by central banks to ease a credit crunch, dealers said.

The single European currency fell to a two-month low again the dollar but in late European trade recovered to $1.4343 from $1.4416 in New York late on Tuesday.

The dollar rose to 113.39 yen from 113.36. The euro was weaker after the German Ifo business survey continued to show conditions in the eurozone’s largest economy worsening.

But the currency’s losses were limited as markets expect the European Central Bank to remain concerned enough about high inflation to leave interest rates unchanged in the near future.

Steve Barrow, currency strategist at Bear Stearns, warned the ECB not to “turn maverick and start intimating or even unleashing tighter policy” at a time when central banks are working overtime to ply the markets with liquidity to offset the deepening credit crunch.

“It would be complete anathema and the euro would be through $1.60 in a shot,” he said.

The pound meanwhile fell below the two-dollar mark for the first time since September after sterling markets moved to price in an increasing likelihood of aggressive interest rate reductions from the Bank of England following a dovish set of minutes.The minutes to the December 6 meeting of the BoE’s Monetary Policy Committee showed that the nine-member panel voted unanimously to cut its benchmark Bank rate a quarter point to 5.50 per cent.

In late European trading on Wednesday, the euro changed hands at $1.4343, against $1.4416 late Tuesday, at 162.63 yen (163.43), 0.7191 pounds (0.7153) and 1.6593 Swiss francs (1.6604).

The dollar stood at 113.39 yen (113.36) and 1.1569 Swiss francs (1.1516). The pound was at $1.9949 ($2.0147).—AFP