LONDON (AFX) - The euro was slightly weaker against the dollar in early trade as doubts grow about the likelihood of another interest rate reduction from the European Central Bank, dealers said. Steve Barrow, currency strategist at Bear Stearns, thinks the euro could come under pressure if the ECB fails to cut rates this morning, and could drift through the 91 level against the dollar if rates are held. Barrow, who has a one-month target for euro/dollar of 88, thinks the downside risks on the euro are greater than the upside potential, and a failure to cut rates will exacerbate these risks. An easing later today is far from guaranteed in the light of recent statements from council members, most notably from ECB president Wim Duisenberg. Last week, a majority of economists polled by AFX News expected a cut in light of the disappointing economic data coming out of the euro zone following the terrorist attacks on Sept 11. However, the ECB president suggested at last weekend's G7 meeting of finance ministers and central bankers that the economic slowdown in the euro zone will be shortlived. He also said that the Sept 17 reduction could be seen as the bringing forward of a rate cut that was in the pipeline anyway. The ECB cut rates on Sept 17 by 50 basis points taking the key minimum bid rate on the ECB's main refinancing operations to 3.75 pct. Since then, both the US Federal Open Market Committee and the Bank of England have cut rates again. The ECB interest rate decision is announced at 12.45 pm. "It's completely unclear what the ECB will do," said Tony Norfield, global head of forex strategy at ABN Amro. "The market is not pricing in any cuts." Conversely, Bear Stearns' Barrow thinks the upside for the dollar outweighs the downside, especially if there is a quick resolution in Afghanistan. However, he said any further terrorist reprisals could cause "wholesale economic dislocation", and the dollar could fall significantly. "In the meantime, we're going to stay in a low volatility environment, until something cracks either way on the military front," he said.