The dollar declined over the weekend after US and UK troops in Iraq encountered heavy resistance in the south of the country. US Army Lt. Gen. John Abizaid said forces endured "the toughest day of resistance that we've had thus far" at Nasiriyah. During the encounter, Iraqi forces killed and wounded several US Marines when a troop carrier was hit with a rocket-propelled grenade. Up to 12 others have been captured and some were shown on Iraqi state television as prisoners. At 0600, the euro was trading at USD1.0616, up almost 1pc in the past 24 hours. Meanwhile, oil prices jumped 1.9pc to amid news that the progress of US and UK forces has stalled. Crude oil on the NYMEX rose 51c to USD27.42 per barrel.
The market also kept the dollar under pressure after it emerged that coalition troops had not gained control of the southern port of Umm Qasr as early as had been previously reported, raising questions over other news on the progress of the war. Meanwhile, Baghdad took another pounding from the air overnight and US president George Bush said Operation Iraqi Freedom was proceeding as planned. ///www.fxcentre.com