The euro slipped in later afternoon trade and although the dollar was off highs it was still well bid, riding on the progress made by US troops in Iraq. At 1650, the single currency was trading down at USD1.0619, while against sterling it stood at STG0.6855. The sharp rise on Wall Street alongside falls in the price of gold and oil also proved supportive for the dollar, according to dealers.
Markets are still holding out hope for a quick conclusion to the war in Iraq and if this happens economic fundamentals will again hold sway, they added. Sterling also came off highs along with the dollar. However, it was still supported by this morning's economic data which showed UK manufacturing sector output in February confounded market expectations after registering a second monthly increase - suggesting that there is a gap between hard official data and survey based figures.// www.fxcentre.com