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 Europe's currency after a European Union report showed consumer prices accelerated at the fastest pace in almost 16 years this month.

The dollar fell 0.3 percent to $1.5836 per euro at 10:10 a.m. in New York, compared with $1.5796 on March 28. The yen declined 0.4 percent to 99.62 per dollar, from 99.23 at the end of last week. It dropped 0.4 percent to 157.43 versus the euro, compared with 156.79 on March 28.

The U.S. currency has lost 8.4 percent against the euro this quarter, the most since December 2004. It touched $1.5903 per euro on March 17, the lowest since the European currency made its debut in 1999., Bloomberg
3/31/2008 7:35:51 AM