*US Dollar keeps falling against rising Euro*

The euro has risen to new highs against the US dollar, near the $1.38
mark, amid lingering worries about the US economy.

With investors fearful the US housing slump will hit the wider economy,
the euro rose as high as $1.3784 before pulling back slightly to $1.3761.

The dollar's latest fall came after the Standard & Poor's credit rating
agency said it may downgrade $12.1bn of bonds backed by US sub-prime
home loans.

Meanwhile, the pound hit $2.0336 as it extended its gains against the
dollar.

See how the dollar has lost ground against the euro

The pound is at a 26-year high against the US currency amid contrasting
prospects for interest rates in the two countries.

The result has been to put the dollar under some sustained pressure
David Jones, CMC Markets

Q&A: Strong pound

US housing worries led to falls in Asian and European stock markets in
early trading, echoing weakness on Wall Street on Tuesday.

By mid-morning, the euro had eased slightly to $1.3740 against the dollar.

"Currency markets have arguably been left focusing on just one point at
the moment and that's concern over the possible collapse of the US
sub-prime lending market," said David Jones, chief market analyst at CMC
Markets.

"The result has been to put the dollar under some sustained pressure."

Repossessions

Sub-prime mortgages are higher-risk loans given to borrowers with a poor
credit rating or those on low incomes.

US house repossessions in the sector have reached record highs this year.

Both the euro and the sterling have benefited from recent interest rates
rises by the European Central Bank (ECB) and the Bank of England.

While the ECB has kept eurozone rates on hold at 4% this month, they
have doubled in 18 months, and more rises are expected by the end of the
year.

The Bank of England last week increased rates to 5.75%, and most
analysts expect a further rise before the end of the year, as both it
and the ECB move to slow inflation.