London, March 18 (Bloomberg) -- The British pound gained against the euro for a second day as investor demand for Europe's common currency waned on speculation a war in Iraq will be short. The pound strengthened to 67.40 pence per euro at 11 a.m. in London, from 67.71 late yesterday. That trimmed its drop to 6.3 percent in the past six months. The U.K. currency was unchanged against the dollar at $1.5683. U.S. President George W. Bush triggered a 48-hour global countdown to war by ordering Iraqi leader Saddam Hussein to leave his country or face an attack. The deadline means a conflict might begin as early as this week, analysts said.
``The market assumes a war will be short, sharp and successful,'' and that's hurting demand for the euro and the Swiss franc, said Mitul Kotecha, head of foreign exchange at Credit Agricole Indosuez. ``There's no sign'' of a long conflict. The euro had gained 5.2 percent versus the pound and 6.7 percent against the dollar since United Nations weapons inspectors entered Iraq in November as investors sough the safest currencies on speculation the U.S. and U.K. would lead an attack. Michael O'Hanlon, a defense analyst at the Brookings Institution, said the war probably will be ``short but potentially rather bloody'' if the fighting continues to the streets of Baghdad, the Iraqi capital. //www.quote.bloomberg.com