LONDON - The dollar dipped Monday against the euro and yen as dealers eyed renewed international efforts to free up the banking sector from the global credit crunch.

Hopes grew for new measures by incoming US president Barack Obama to spur the American economy and rescue ailing banks after Britain unveiled its second bank rescue package, analysts said.

In late morning London trade, the euro firmed to 1.3268 dollars from 1.3264 dollars in New York late on Friday.

Against the Japanese unit, the dollar eased to 90.60 yen from 90.67 yen on Friday.

"The dollar remains under selling pressure after a sell-off on Friday," said Derek Halpenny, European Head of Global Currency Research at The Bank of Tokyo-Mitsubishi UFJ in London.

"Market participants anticipated a week in which the global authorities may announce further key policy proposals in an effort to improve the flow of credit and hence the outlook for the financial markets and the real economy."

Britain on Monday unveiled an insurance scheme to protect banks from so-called toxic assets, in a second multi-billion pound rescue package seeking to boost lending by banks crippled by the credit crisis.

Authorities did not put a total price tag on the new measures, which came after a first package last October. But press reports suggested it was worth some 200 billion pounds (295 billion dollars, 220 billion euros) overall.

The announcement came as Royal Bank of Scotland, majority-owned by the British taxpayer, said it estimated an underlying annual loss of up to 8.0 billion pounds.

Markets were also watching reports that Washington was planning to set up a government entity that would buy back soured assets and loans from banks in an effort to cleanse the financial system, dealers said.

Traders were anticipating renewed efforts by the Obama administration to shore up the economy and clean up the debt-laden financial system, analysts said.

Halpenny added: "With the UK government indicating that there is some global coordination behind these announcements, market participants are correctly anticipating further announcements from other governments, certainly from the US and Europe.

"With Barack Obama's inauguration tomorrow, there are high expectations of policy announcements there in the coming days and weeks," said the analyst.

Dealers said the inauguration on Tuesday could lift confidence in the US economy, even though conditions are expected to remain tough for some time.

US financial markets will be closed Monday for the Martin Luther King public holiday.

In London trading, the euro changed hands at 1.3268 dollars against 1.3264 dollars late on Friday, at 120.26 yen (120.35), 0.9053 pounds (0.9000) and 1.4869 Swiss francs (1.4854).

The dollar stood at 90.60 yen (90.67) and 1.1135 Swiss francs (1.1197).

The pound was at 1.4664 dollars (1.4735).

On the London Bullion Market, the price of gold rose to 842.24 dollars an ounce from 833.75 dollars late on Friday.