The euro continued to edge up towards USD1.08 against the dollar this morning as war concerns returned to the forefront overnight. Renewed concern of a military conflict with Iraq also hit Wall St, ending a two day winning streak for the Dow Jones and the Nasdaq. The euro ignored the bearish economic news that a group of forecasters from the DIW institute expect Germany to post a technical recession in the current quarter. But the news was nothing new to the market and did little to offset the dollar's decline.
"The dollar/euro rate is sticking to familiar territory as war pressures dominate," said Geraldine Concagh, senioer economist at AIBT Treasury. "The dollar opens up on the defensive although overnight ranges tended to be narrow." She said some direction will be provided later today with the publication of the Philly Fed, which is expected to fall back, and the trade deficit which is forecast to narrow to USD38.8bn, but will still weigh on the dollar. Meanwhile, sterling remains weak against the euro, at 67.23p; it has lost 1.5pc in value since the Bank of England's interest rate cut on 6 February.//www./www.fxcentre.com