LONDON, March 27: The dollar slid lower against major currencies on Thursday as dealers began to ponder the worrying prospect of the war in Iraq dragging on bloodily for several months.

The euro rose to $1.0732 on Thursday European trading from 1.0694 late on Wednesday in New York.

The dollar slipped slightly against the yen to 119.86 from 119.96 on Wednesday.

Dealers who had banked on the dollar in the expectation of a short, surgical conflict could well change their minds, said Derek Halpenny, an analyst with Bank of Tokyo-Mitsubishi.

A bloody, more prolonged conflict that intensifies global opposition to the war will result in increased appetite for re-establishing the short dollar positions that were recently liquidated by a large portion of the speculative market, he said.

Economists warn that a long war poses a risk for consumer and business confidence and could stymie economic recovery.

Stannard said that worse-than-expected economic data from the United States was also behind the fall in the value of the dollar.

Figures for both durable goods orders and new housing slumped in the United States in February, according to official figures released on Wednesday.

The market is becoming less affected by the minute-by-minute reports. People are looking at a bigger picture, the end of the war and its aftermath,” he said.

A summit Thursday between US President George W. Bush and British Prime Minister Tony Blair on the reconstruction of post-war would thus be closely watched, he added.

The euro was changing hands at $1.0732 from 1.0694 late on Wednesday in New York, 128.62 yen (128.27), 0.6817 pounds (0.6790) and 1.4792 Swiss francs (1.4725).

The dollar was being quoted at 119.86 yen (119.96) and 1.3786 Swiss francs (1.3808).

The pound was at $1.5743 (1.5739), 189.68 yen (188.87) and 2.1700 Swiss francs (2.1732).

On the London Bullion Market, the price of an ounce of gold rose to $331.45 from 329.95 late Monday. —AFP