Dollar under renewed pressure

The US dollar has come under renewed pressure, following increasing threat of a US assault on Iraq.

The dollar has again gone above the 0.97c point against the euro and is currently at $1 to 0.9799 euro cent.

The renewed pressure follows US Vice President Cheney's remarks that a US attack on Iraq will have to be sooner rather than later.

Last week, US President, George Bush was told that he did not need congressional approval to launch an attack on Iraq. So far, the US does not have the support of many of its allies and Russia and Germany along with several Arab countries have voiced opposition.

Investors are worried about what implications a war would have on the markets which only seem to be stabilising following months of intense volatility.

Increasing pressure on the dollar is bad news for the markets as it represents once again, a lack of confidence in the US markets.

Recent economic data show that investor confidence is at a nine month low and with no interest cut from the Feds evident, investors are hoping that the dollar will stable out again.

Early last month, the currency fell below parity levels against the euro and had only managed to sustain a recovery for a few weeks.

All eyes are now set on the markets, for an indication of how investors would react to the currency's recent movements.