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Dollar falls to new low against euro

The US dollar hit a new low against the seemingly unstoppable euro on Friday as the 13-nation currency broke through US$1.41.

The euro's ascension renewed calls from French President Nicolas Sarkozy for the European Central Bank (ECB) to follow the US Federal Reserve and cut interest rates, which would help keep French exports competitive.

Despite the worries of some exporters -- European aircraft maker Airbus said if the euro keeps rising it may have to seek new cost savings -- ECB President Jean-Claude Trichet and German Chancellor Angela Merkel stood firm that the ECB must remain independent.

The currency of the 13 euro nations, which have more than 317 million residents and account for more than 15 percent of global GDP, surged as high as US$1.4119 before falling back to US$1.4083 by late afternoon, above the US$1.4076 it bought in New York on Thursday.

The US dollar fell further against the Canadian dollar after reaching parity for the first time since 1976 on Thursday. One Canadian dollar bought US$1.0068 in US currency at its highest point on Friday before edging down to US$0.9995 in late New York trading, barely beating US$0.9993 late on Thursday.

The Canadian dollar has experienced a summer of record highs on soaring crude prices and a strong economy. Retail prices, however, have yet to adjust, according to an economist at one of Canada's large banks.

Doug Porter, deputy chief economist at the Bank of Montreal, released a study Friday that indicates Canadians are paying roughly 24 percent more than Americans on identical goods despite parity in the US and Canadian dollars.

Porter compared 17 goods sold in Canada and the US, finding that retail prices in Canada have not yet responded because most are set a year in advance.

In other trading, the US currency slid to US$2.02 against the British pound from US$2.0099 late on Thursday. It rose against the Japanese currency to ?115.39 from ?114.44.

The US dollar bought 1.1726 Swiss francs, up from SF1.1717.
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