LONDON, March 3: The dollar zig-zagged in a tight range against other leading currencies on Monday as dealers brushed aside the latest political developments over the Iraq crisis and focused on economics instead.

The single European currency traded at $1.0793 from 1.0804 late on Friday in New York.

The dollar stood at 117.99 yen from 118.11 on Friday.

The major currencies were unmoved by the destruction by Iraq of banned missiles under UN supervision for a third day and news that Turkey’s parliament’s had refused to allow the deployment of US troops in the country.

But the Turkish currency and stocks were rocked by the decision, which raised fears that Turkey would miss out on the multi-billion dollar aid package that Washington had promised in return for permission to deploy troops.

The news over the weekend that the Turkish parliament voted down a bill to have US troops on its soil was clearly a major negative for Turkish markets, but it seems to have had a very limited impact on euro-dollar at the moment, said Bank of America analyst Callum Henderson.

The major foreign exchange markets are holding in pretty tight ranges for now... sceptical that (the Turkish decision) will stop any prospects of a war given the apparent US determination to go ahead and disarm Iraq come what may, he added.

Analysts said that the focus of the foreign exchange market was returning to economics, with an interest-rate decision by the European Central Bank on Thursday taking centre stage.

I think that markets have gone, albeit temporarily, back to focusing on so-called fundamentals and the ECB meeting is probably the most important of those, said Henderson, who expects a cut of 50 basis points to 2.25 per cent.

The dollar continued to draw strength against the yen from worries about intervention by the Japanese authorities.

Japan’s monetary authorities spent about $4.3 billion in February on currency market intervention in a bid to halt a rapid rise in the yen, finance ministry officials confirmed last week.

The dollar has remained well supported around the 118.00 (yen) level... after the confirmation on Friday that the Bank of Japan had intervened selling approximately 513.0 billion of yen for dollars on behalf of the Ministry of Finance, said Bank of Tokyo Mitsubish analyst Derek Halpenny.

The news came as little surprise to the market despite the comment from Finance Minister (Masajuro) Shiokawa who had indicated that no intervention had taken place, he added.

The euro was changing hands at $1.0793 from 1.0804 late on Friday in New York, 127.33 yen (127.59), 0.6856 pounds (0.6866) and 1.4619 Swiss francs (1.4599).

The dollar was being quoted at 117.99 yen (118.11) and 1.3543 Swiss francs (1.3514).

The pound was at $1.5739 (1.5726), 185.71 yen (185.74) and 2.1320 Swiss francs (2.1252).

On the London Bullion Market, the price of an ounce of gold fell to 346.85 dollars from $351.25 late on Friday. —AFP