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European aircraft constructor Airbus today warned that it could be forced to make further cuts at the company if the euro continues to rise against the dollar.

In a radio interview the firm's chief operating officer said the cost-cutting plan launched by Airbus earlier this year was based on a euro-dollar exchange rate of $1.35.

But Fabrice Bregier told French radio station BFM that the company might need to find a further €1 billion (£0.7 billion) in savings as a result of the euro climbing against the dollar.

Europe's single currency hit a new high against the dollar today, amid speculation that America's central bank will cut interest rates further in a bid to prevent the current global credit crunch from harming the wider economy.

The dollar traded above $1.41 against the euro after Federal Reserve chairman Ben Bernanke warned US lawmakers that a downturn in the country's housing market could get worse.

Rising default levels in the US sub-prime mortgage market have caused banks to become more wary about lending cash to one another, due to uncertainty about the extent to which they are exposed to bad debts in the sector - which makes home loans available to those on low incomes or with poor credit ratings.

On Tuesday the Fed announced that it was cutting America's benchmark interest rate to 4.75 per cent in order to ease growing economic pressures.

But the half-point cut has seen the value of the greenback slide against the euro, with the European currency gaining momentum on the back of speculation that interest rates could rise in the eurozone, which has been experiencing strong growth.

"The recent decline in the dollar against the euro has more or less tracked the decline in the gap between expected US and eurozone interest rates," said Capital Economics in a note yesterday.

However analysts at the organisation warned that the dollar may need to fall even further in order to reduce "economic imbalances".

Commentators say consumers in the eurozone could benefit from the falling dollar, with the price of some imported goods falling as a result.

However the slump in the value of the currency could harm exports to the US, making European-made goods more expensive there.

Yesterday the Fed's chief gave few hints as to whether a further rates rise would be on the cards in the US, a move which could see the dollar fall further.

Appearing before a congressional committee Mr Bernanke said the Fed had introduced this week's rate cut in order to "try to forestall potential effects of tighter credit conditions on the broader economy".

But, in comments reported by the Associated Press, he warned: "There's quite a bit of uncertainty, so we're going to have to continue to monitor how the financial markets evolve… and try to keep reassessing our outlook and adjusting policy."