The euro soared to a new record of $1.4120 in European trading earlier this morning. It later fell back to trade at $1.408 on Friday evening.
The fresh dollar falls came after Federal Reserve chairman Ben Bernanke warned yesterday that the US mortgage crisis could deepen.
Currency traders said his remarks had pushed the dollar lower against other major currencies.
Dealers said expectations of further US interest rate cuts were likely to bring renewed selling pressure on the dollar.
European industrialists are concerned the euro's rise is hurting exports and could lead to job cuts in manufacturing.
The European planemaker Airbus said today that the rise in the euro to above $1.4 meant the European plane maker might have to find another billion euros in savings under a restructuring plan drawn up with the euro at $1.35.
'If the euro remained durably at $1.45, that would mean we had to find one billion euros in additional savings under Power 8,' CEO Fabrice Bregier said today.
The Power 8 plan will see the sale or closure of several sites in the four countries where Airbus is based as well as more than 10,000 job cuts at its own operations and suppliers.
Bregier joins a chorus of French industrialists, such as the chief executive of Peugeot Citroen who are concerned the euro's rise to record highs is hurting exports and could lead to job cuts in European manufacturing.
Critics say France is late in making structural adjustments to become more competitive.
Bregier said he hoped the European Central Bank would put in place a policy that would allow the euro to retreat and noted French President Nicolas Sarkozy was already speaking up for exporting companies such as Airbus.
French President Sarkozy said yesterday the president of the European Central Bank, Jean-Claude Trichet, should take note of the U.S. Federal Reserve's recent decision to cut its interest rates. "
'I tell Mr Trichet ... look at what the others are doing; what the others do is not necessarily a nightmare,' Sarkozy said in a television interview.
