LONDON (AFX) - The dollar was higher in midday trade on the back of renewed hopes of a US rate reduction, dealers said. As the likelihood of a double dip recession in the US increases, attention is also being drawn to poor performances on European bourses, they added. The euro was the main victim of the dollar's rise, falling below the 0.97 usd mark for the first time since late June. Divyang Shah, strategist at IDEAglobal.com said the next support level for the euro is at 0.9575 usd. A break of this level could send the euro tumbling, he added. But the euro's downside is also likely to be limited by the large US current account deficit, he added. "Currently, it is concerns over double dip that is dominating with continued erosion in risk tolerance," he said. According to Michael Klawitter, currency strategist at West LB, rate cut hopes are adding to the dollar's appeal. Going by the futures market, there is a 75 pct probability of a 25 basis point cut by the end of September and a 56 pct chance that rates are down by 50 basis points at the end of January, he said. But participants have also started to look at euro zone data more closely. With players having taken long euro positions, some unwinding is likely, putting pressure on the single currency, dealers said. Quite apart from that, the dollar is also enjoying a boost from repatriation flows, Shah at IDEAglobal said. Sterling was softer, looking vulnerable to signs of rising economic risks after yesterday's dismal UK industrial production data. The yen moved lower, plagued by the massive falls on the Nikkei.