February 15, 2003	Saturday	Zul Hijjah 13, 1423

LONDON, Feb 14: The euro fell back against the dollar and yen Friday as the United Nations’ chief weapons inspector Hans Blix presented a key report on Iraq’s alleged weapons of mass destruction to the Security Council.

The single European currency fell to 1.0801 dollars from 1.0829 late on Thursday in New York.

The dollar stood at 120.40 yen from 120.56 late on Thursday.

Blix “has been suggesting that Iraq is more compliant. There seems to be a little more conciliatory tone” today than in Blix’s last report in January, said Brian Martin, a currency strategist at Barclays Capital.

The knee-jerk reaction of the currency market was to buy dollars, while gold was also sold off in response, he noted.

The dollar eased after an initial uptick, however, and the risks remain weighted against the US currency in the event the US decides to lead only a narrow coalition of countries in forcibly disarming Iraq.

Blix produced “no smoking gun, but he almost showed no gun at all,” said Chris Furness, senior currency strategist at 4CAST.

“Nobody in their right mind is going home long dollars” ahead of the long US weekend, with the US market closed for Presidents’ Day on Monday.

He referred to trading positions where dealers hold more dollars relative to the foreign currencies they trade against the US unit.

Steven Pearson, chief currency strategist at HBOS, explained that “the market has yet to decide the consensus view” of the consequences of Blix’s report.

In a warmly applauded speech to the Security Council, French Foreign Minister Dominique de Villepin warned against an early use of military action to force Iraq to disarm.

The euro was changing hands at 1.0801 dollars from 1.0829 late on Thursday in New York, 130.03 yen (130.57), 0.6699 pounds (0.6686) and 1.4701 Swiss francs (1.4673).

The dollar was being quoted at 120.40 yen (120.56) and 1.3610 Swiss francs (1.3544).—AFP