The euro continued its slow ascent against the dollar in early deals today, taking up where it left off after yesterday's gain on the back of growing uncertainty regarding the situation in Iraq. By 0915, the single currency was trading up at USD1.0781, although against sterling it was down a touch at STG0.6608. "It stopped shy of USD1.08, with overnight news that North and South Korea are to look for a diplomatic solution to the nuclear stand-off and a rally in US equities taking some pressure off the dollar," said Geraldine Concagh, senior economist, AIB Global Treasury.
"Pre-weekend profit taking may encourage a bit of a dollar correction from here, though tensions over Iraq remain high. A report in the UK Guardian that President Bush is determined to go to war with Saddam Hussein in the coming weeks, without UN backing if necessary, seems to be getting market attention and could invite some fresh dollar selling over the day," she added. Sterling benefited from yesterday's better than expected UK retail sales report for December, which showed a surprising resilience on the part of the UK Christmas shopper. //www.fxcentre.com