The dollar also eased against the German mark, closing at 1.8190 marks.

In earlier European trading, it closed at 1.6507 marks, up from 1.6465.

In Frankfurt trading, the rate cut failed to check the fall of the dollar, which closed at 1.8165 marks, down from 1.8506.

They closed today at 307 marks, or $173.

Against the German mark, the dollar strengthened after a volatile week, closing at 1.7475 marks, up from 1.7295.

Currency markets had expected the rate cut, and the pound closed at just under 2.54 German marks, about where it started today.

It remained above the important 1.90-mark level, closing at 1.9128 marks, up from 1.9068 on Monday.

It strengthened at the end of the week, closing at 1.504 marks.

The pound closed at 2.4246 marks, down more than 2.5 pfennigs.

Yesterday's trading took the dollar far above that ceiling, and it closed at 1.9395 marks.