The US dollar gained against the euro and other major currencies Wednesday, as concern mounted about a fall in the value of currencies in Central and Eastern Europe.
The euro slid to 1.2535 dollars at around 2200 GMT from 1.2585 late on Tuesday.
But the European single currency gained against the Japanese yen, rising to 117.45 yen from 116.31 yen on Tuesday.
The dollar advanced to 93.72 yen from 92.39 yen and climbed to 1.774 Swiss francs from 1.1694.
"The US dollar saw a mixed day of trading on Wednesday, gaining against the euro, Swiss franc, and Japanese yen while falling versus the commodity bloc. Based on broad losses for the Japanese yen, the moves signaled slight improvements in risk appetite," said Terri Belkas at Forex Capital Markets.
The euro hit its lowest point of the day, at 1.2513 dollars, just after the European Commission said it was concerned about the "volatility" of currencies in Central and Eastern Europe (CEE), several of which have fallen sharply in recent days.
The Hungarian forint, the Czech koruna, the Polish zloty and the Romanian leu have been shaken by fears of massive capital flight from the region during the economic crisis and concern over the health of banks there.
"Markets are at risk of developing a vicious circle as CEE countries adjust imbalances ... The Western credit crunch has been exported into CEE," French bank BNP Paribas said in a statement.
"There is talk in the market that France and Germany will be forced to contemplate a bailout of some countries in the CEE given that some of their banks are heavily exposed to the CEE region," BNP Paribas said.
German lender Commerzbank commented: "Market attention is increasingly focusing on the difficulties of the Eastern European currencies. The problems in that area are everything but good news for the euro."
International ratings agency Moody's earlier this week warned that it could be forced to downgrade the credit rating for western European banks because of their debt exposure in crisis-hit Central and Eastern Europe.
Analysts also said the euro could fall further on the possibility of bank nationalizations in Germany, which received a boost on Wednesday with a new temporary law adopted by Germany's cabinet.
The law would allow the government for the first time in modern German history to nationalize banks by seizing their shares -- a measure that the law stressed should be temporary and a "last resort."
In late New York trading, the pound was at 1.4213 dollars compared with 1.4238 Tuesday.
The euro slid to 1.2535 dollars at around 2200 GMT from 1.2585 late on Tuesday.
But the European single currency gained against the Japanese yen, rising to 117.45 yen from 116.31 yen on Tuesday.
The dollar advanced to 93.72 yen from 92.39 yen and climbed to 1.774 Swiss francs from 1.1694.
"The US dollar saw a mixed day of trading on Wednesday, gaining against the euro, Swiss franc, and Japanese yen while falling versus the commodity bloc. Based on broad losses for the Japanese yen, the moves signaled slight improvements in risk appetite," said Terri Belkas at Forex Capital Markets.
The euro hit its lowest point of the day, at 1.2513 dollars, just after the European Commission said it was concerned about the "volatility" of currencies in Central and Eastern Europe (CEE), several of which have fallen sharply in recent days.
The Hungarian forint, the Czech koruna, the Polish zloty and the Romanian leu have been shaken by fears of massive capital flight from the region during the economic crisis and concern over the health of banks there.
"Markets are at risk of developing a vicious circle as CEE countries adjust imbalances ... The Western credit crunch has been exported into CEE," French bank BNP Paribas said in a statement.
"There is talk in the market that France and Germany will be forced to contemplate a bailout of some countries in the CEE given that some of their banks are heavily exposed to the CEE region," BNP Paribas said.
German lender Commerzbank commented: "Market attention is increasingly focusing on the difficulties of the Eastern European currencies. The problems in that area are everything but good news for the euro."
International ratings agency Moody's earlier this week warned that it could be forced to downgrade the credit rating for western European banks because of their debt exposure in crisis-hit Central and Eastern Europe.
Analysts also said the euro could fall further on the possibility of bank nationalizations in Germany, which received a boost on Wednesday with a new temporary law adopted by Germany's cabinet.
The law would allow the government for the first time in modern German history to nationalize banks by seizing their shares -- a measure that the law stressed should be temporary and a "last resort."
In late New York trading, the pound was at 1.4213 dollars compared with 1.4238 Tuesday.
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