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Last Updated: Friday, 21 September 2007, 18:55 GMT 19:55 UK
Jobs fears as euro gets stronger
Money changer exchanges euros for dollars
The dollar has been weakening against the euro in recent weeks
More cuts may have to be made at Airbus if the euro continues to remain strong against the dollar, an executive at the European planemaker has warned.

Chief operating officer Fabrice Bregier told French radio station BFM a further 1bn euros may need to be added to a savings plan based on a $1.35 euro.

On Friday the euro hit a fresh record high against the dollar of $1.4120.

Airbus may also have to buy more goods in the dollar zone - where it currently buys about half its supplies, he added.

Buying more goods in the dollar zone would help lower costs as it would mean cheaper prices.

"If the euro remains durably at $1.45, that would mean we had to find one billion euros in additional savings under Power 8 [restructuring plan]," he told the French station.

"Our reply to a strong euro is, first to be more competitive, second to buy more in the dollar zone," he added.

The euro later dropped down to slightly below $1.41. Meanwhile it rose to a one-and-a-half year high against British sterling, of 70.20 pence.

New projects threatened

European industrialists are concerned that the euro's rise is hurting exports and could lead to job cuts in European manufacturing.

US DOLLAR WEAKNESS
The greenback has hit fresh lows against the euro at $1.4120
It fell below one Canadian dollar for the first time in more than 30 years
One British pound was worth $2.0173 at one point, close to 26-year highs
The falling dollar pushed up spot gold prices to $739 an ounce, not seen since 1981
Since September 2003, the US dollar has lost about 25% of its value against sterling

And Mr Bregier said that if the euro remained high it would "not allow us to invest in new projects".

The euro gains on Friday came a day after breaching the psychologically-important $1.40 mark.

The euro has been strong since US rates were cut to 4.75% on Tuesday.

This and a warning from Federal Reserve chief Ben Bernanke on Thursday that the US housing market crisis might deepen prompted the dollar falls.

Analysts have said the impact of the falling dollar on European consumers and businesses may be mixed.

Eurozone consumers may benefit from cheaper prices for some imported goods, while input costs for eurozone firms may fall as oil, metals and many raw material prices are quoted in dollars.

However, while the strong euro may cut some import costs, it could also have a negative effect on exports as European-made goods become more expensive in the US.

The US is Europe's largest trading partner.

The fall in the value of the dollar could also hurt growth in Asia, with the US being the largest market for China, Korea, and other Asian exporters.

US dollar versus the euro since 1999



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SEE ALSO
Dollar hits new low against euro
20 Sep 07 |  Business
Airbus costs knock EADS profits
26 Jul 07 |  Business
Yuan hits new high versus dollar
25 Jul 07 |  Business
European economy 'sound' - Trichet
11 Sep 07 |  Business
Dollar under continuing pressure
12 Jul 07 |  Business



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