April 4, 2003	Friday	Safar 1, 1424

LONDON, April 3: The dollar higher against other leading currencies on Thursday as US-led forces moved into the outskirts of Baghdad, assuaging concerns about the risk of a prolonged war in Iraq.

The single European currency dropped to 1.0709 dollars from 1.0764 late on Wednesday in New York.

The dollar climbed to 119.28 yen from 118.90 on Wednesday.

The US currency’s gains came as US-led forces closed in on Baghdad, poised outside the airport as the war to oust Iraqi President Saddam Hussein entered its third week.

Dresdner Kleinwort Wasserstein economist Paul Mackel said the progress by the coalition forces was buoying the dollar on the back of the idea that perhaps the war will be shorter than some had anticipated last week.

If that continues to develop then you could see some further dollar upside, he said, but added that the dollar was unlikely to rise above 1.05 per euro in the next few weeks.

With Iraq still grabbing the headlines, the European Central Bank’s monthly interest rate meeting was drawing little interest with analysts expecting no change in euro-zone monetary policy.

The gathering in Rome, one of two a year held at a venue other than the central bank’s Frankfurt headquarters, comes just one month after the ECB trimmed its key rate by a quarter of a percentage point.

I think most of the market is convinced that it’s going to be a dead event, (with) rates staying unchanged at 2.5 per cent while they maintain their easing bias, said Mackel.

Official figures showing that unemployment in Germany rose by 52,000 on a seasonally adjusted basis a bigger increase than analysts had expected to 4.414 million also lent a negative tone to the euro.

In view of the economic stagnation and the war on Iraq, no improvement in the labour market is in sight, the German labour office warned.

The euro was changing hands at 1.0709 dollars from 1.0764 late on Wednesday in New York, 127.72 yen (127.99), 0.6850 pounds (0.6867) and 1.4840 Swiss francs (1.4843).

The dollar was being quoted at 119.28 yen (118.90) and 1.3860 Swiss francs (1.3790).

The pound was at $1.5635 (1.5666), 186.44 yen (186.27) and 2.1665 Swiss francs (2.1603).

On the London Bullion Market, the price of an ounce of gold slipped to $327.90 from 329.30 on Wednesday afternoon. —AFP