The great Bob Dylan once wrote "so you better start swimmin', or you'll sink like a stone, because the times they are-a changin'."

The dollar bears better start swimming, or at least change their positions, because the dollar's improbable rise continues.

The British pound fell to a two year low versus the dollar Wednesday, plunging 3 cents -- a gargantuan move in the currency market for one day -- to $1.8651, after the Bank of England lowered its GDP growth forecast for the United Kingdom, Bloomberg News reported Wednesday. The pound, which traded at $2.0157 last month, has now fallen about 7.5% versus the dollar in two weeks.

The pound also fell about five yen to 202.68 versus Japan's yen Wednesday morning.

Bank of England Governor Mervyn King said 2009 will be "painful" with zero growth and high inflation, The Telegraph reported Wednesday.

Further, although the Bank of England underscored the need for monetary policy vigilance to control inflation, currency traders interpreted the bank's GDP comments as a sign that an interest rate cut is likely from England's central bank, currency trader Andrew Resnick said.

"It was a bearish statement regarding the pound, in my interpretation," Resnick said. "The economy is cooling in the U.K., the housing slump is starting to take a toll there too, so lower interest rates are ahead. The pound is headed lower against the dollar and yen." Resnick added that he has pound-short positions in the pound-dollar and pound-yen currency pairings.

Pound, dollar: 'Dueling lower interest rates'

However, while Resnick is bearish regarding the pound, that does not necessarily mean he's also a dollar bull.

"The problem is the Fed [U.S. Federal Reserve] is likely to cut interest rates as well, setting up a situation of 'dueling lower interest rates,' " Resnick said. "The dollar has benefited from a lower oil price and the realization that emerging market economies are slowing, but the U.S still has many economic headwinds, so I still can't be a dollar bull at this point, outside of the pound-dollar pairing, which is really more of a pound weakness play."

Resnick added that he "needs to see some signs of GDP strength in the U.S." before he could commit to the dollar bull camp.

Currency Analysis: While some weakness in the pound would be welcomed by Britain's exporters -- it makes their products less expensive to foreigners -- the U.K.'s economic weakness and the Bank of England's comments are not good news for the global economy. The industrialized world cannot grow at an adequate rate if the large U.S. and U.K. economies are stalling.