Monday, March 31, 2008

Dollar Heads for Biggest Quarterly Loss Against Euro Since 2004

The dollar headed for its biggest quarterly loss against the euro in almost four years as the Federal Reserve cut its target lending rate by the most since 1984 to revive the economy while the European Central Bank held borrowing costs at a six-year high to contain inflation.

The dollar traded within a cent of a record low against the euro after a European Union report showed consumer prices accelerated at the fastest pace in almost 16 years this month. The pound fell to an all-time low against the euro, posting its largest-ever quarterly decline, after U.K. housing prices dropped in March for a sixth month.

``Heading into this quarter, a lot of people thought the worst for the dollar was behind us,'' said Daniel Katzive, a currency strategist at Credit Suisse Group in New York. ``It's pretty clear that this view has been damaged.''

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