January 18, 2003	Saturday	Ziqa'ad 14, 1423

LONDON, Jan 17: The dollar was under fire against a broad range of currencies on Friday, sliding to fresh multi-month lows against both the euro and Swiss franc on rising worries about a possible war in Iraq.

The single European currency climbed to $1.0658 from 1.0614 late on Thursday in New York, having earlier hit a peak of 1.0668 the unit’s highest level since October 1999.

The dollar meanwhile slipped to 117.73 yen from 117.79 on Thursday.

The dollar moves we’re seeing against a whole range of currencies are a reflection of the uncertainty and the fact people want safe havens, said Commerzbank chief currency strategist Nick Parsons.

They said that notwithstanding Washington’s relatively calm response to the find, and chief UN inspector Hans Blix’s earlier admission he was not certain about whether the warheads were listed in Baghdad’s declaration, the market was increasingly convinced the United States would ultimately attack Iraq.

Any further findings of potential breaches in Iraq’s weapon’s stance is likely to be met with further selling of the dollar, warned WestLB analyst Michael Klawitter.

Commerzbank’s Parsons said that aside from the euro and Swiss franc, the main beneficiaries of rising risk aversion among investors were the Japanese yen and Norwegian kroner.

The thing that characterises all those currencies is that they’ve got current account surpluses. These are countries that don’t have to rely on international capital flows, Parsons said.

The dollar earlier stumbled to a 47-month low of 1.3680 Swiss francs, before recovering slightly, while, the US unit fell to 6.8295 Norwegian kroner from 6.8481 late on Thursday.

With investors favouring the currencies of country’s with trade surpluses, economists were expecting US November trade statistics to present the dollar with a further challenge later Friday.

The dollar’s in a bear market and one of the characteristics of a bear market is that it doesn’t go up on good news, said Parsons.

Even if the figures are better than expected it will provide only a short-lived boost to the dollar. A lot of investors still want to sell the dollar on any rally, he added.

Analysts were expecting the figures to reveal the world’s leading economy ran a $37 billion deficit in November compared with a $35.1 billion shortfall the previous month.

The euro was changing hands at 1.0658 dollars from 1.0614 late on Thursday in New York, 125.50 yen (125.02), 0.6590 pounds, unchanged from Thursday, and 1.4595 Swiss francs (1.4580).

The dollar was being quoted at 117.73 yen (117.79), and 1.3699 Swiss francs (1.3737).

The pound was at $1.6182 (1.6106), 190.24 yen (190.40) and 2.2159 Swiss francs (2.2124).

On the London Bullion Market, the price of an ounce of gold surged to $356.65 from 352.30 late on Thursday. —AFP