From: MSN Money

LONDON (Reuters) - The U.S. dollar resumed its downward spiral on Tuesday, hovering near a record low against the euro and hitting a nine-year low against a basket of currencies.

News that Russia's central bank may review the share of euros it holds in its currency reserves renewed speculation it might buy more euros and helped lift the single currency against the greenback, analysts said.

``There's a bias in the market to sell dollars and I think the story from Russia triggered (some selling),'' said Aziz McMahon, foreign exchange strategist at ABN AMRO.

The dollar had been treading water after a weekend meeting of Group of 20 finance officials offered no strong measures to halt the U.S. currency's decline, with analysts saying the market had sold the dollar so much already it was in need of a pause.

The dollar was trading at $1.3064 per euro at 1140 GMT, down 0.17 percent from late New York levels and within sight of the record low of $1.3074.

It had earlier strengthened as far as $1.2980 as dealers took profits on a holiday in Japan and ahead of Thursday's holiday in the United States for Thanksgiving.

The dollar hit a nine year low against a basket currencies and a four month low against the pound.

Against the yen, however, it found some respite from last week's 4-1/2 year lows due to market wariness about possible dollar-buying intervention from Asia central banks.

It was at 103.12 yen, down slightly from New York closing levels.

GREENSPAN FACTOR

The dollar's two-month long decline took it to a record low of $1.3074 per euro and a trough near 102.75 against the yen last week.

The fall, driven by a belief the United States wants to see the dollar weaken to ease its massive current account deficit, gathered momentum on Friday after Federal Reserve Chairman Alan Greenspan said the current account gap was unsustainable.

That view strengthened when the G20 communique failed to mention currency volatility explicitly, although analysts said fear of intervention to smooth out currency movements, particularly by Asian central banks and the Bank of Japan, had heightened this week.

Most Asian currencies were below their recent multi-year highs while the Canadian dollar eased off 12-year highs set on Monday around C$1.1818.

``The financial markets in Asia are starting to anticipate some impact on the real economy from currency appreciation and that may spark intervention,'' said Steven Pearson, chief currency strategist at Halifax Royal Bank of Scotland.

``But any intervention we do see will more likely be aimed at smoothing the dollar decline rather than halting or reversing it,'' Pearson added.

Traders said dollar-selling would resume after the U.S. Thanksgiving holiday if the fears of intervention proved unfounded, given it is a light week for data in the United States.

U.S. home sales and the Chicago Fed National Activity Index for October are due at 1500 GMT and European Central Bank Executive Board member Gertrude Tumpel-Gugerell speaks at 1940 GMT.