LONDON, Dec 12: The dollar got a modest boost on Wednesday from central bank action to ease the global credit crunch but then slipped back against the euro as markets concentrated on interest rates, dealers said.

They said there was widespread disappointment at Tuesday’s quarter point cut in US interest rates to 4.25 per cent which produced a sharp setback for stock markets and put the dollar under fresh pressure.

Then news in mid-afternoon European trade that the US Federal Reserve, the European Central Bank and their counterparts in Britain, Canada and Switzerland would coordinate efforts to boost liquidity helped stocks to rally back and this in turn helped the dollar for a while.

However, the prospect that US interest rates might fall further while eurozone rates are on hold or even increased, once again worked against the dollar which was also hit by news of a another large US trade deficit.

In late European deals, the euro was quoted at 1.4687 dollars, up from 1.4685 dollars earlier and 1.4655 dollars in New York late on Tuesday.

In European trade, the euro changed hands at 165.04 yen, up sharply from Tuesday’s late 162.17, 0.7176 pounds (0.7201) and 1.6697 Swiss francs (1.6570).

The dollar stood at 112.36 yen (110.64) and 1.1369 Swiss francs (1.1306).—AFP