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Dollar loses ground against euro

The dollar has plunged to its lowest level against the euro since April 2005 amid concerns for the US economy.

The euro surged to $1.30 against the dollar, with many other currencies following suit. Sterling rose almost 1% to $1.93, the yen hit a two-month high and Russia's rouble rose to a seven-year high. Analysts have voiced concerns about the US economy after the White House downgraded its growth forecasts amid a sharp slowdown in the housing market. Meanwhile, expectations that the European Central Bank is once again about to raise interest rates gave a lift to the euro. However, traders added that thin trade as a result of the US Thanksgiving holiday might have benefited the euro. "For the time, being the news flow is favouring the euro. If we close above $1.30 today, the key will be if we reject all of this as a Thanksgiving phenomenon or not," said Ian Gunner, head of foreign exchange research at Mellon Bank. (BBC NEWS)