In a saucepan cook the shallot in the butter over moderately low heat, stirring, until it is softened, add the wine, and boil the mixture until the wine is almost evaporated. Remove the pan from the heat and whisk in the sour cream, the mustards, the watercress, the water, and salt and pepper to taste. Serve the sauce at room temperature with poached fish or steamed or grilled vegetables.
