Dollar Falls to Record Against Euro

The dollar fell to a record low against the euro as European inflation accelerated and U.S. housing starts tumbled, reducing chances the European Central Bank will follow the Federal Reserve in cutting interest rates., Bloomberg 4/16/2008 6:53:36 AM

The U.S. currency had its biggest decline versus the euro in three weeks, dropping as low as $1.5969. The Canadian and Australian dollars and Norwegian krone increased after crude oil rose to a record of $114.53 a barrel. The euro touched 80.76 pence against the pound, the highest since the European currency's 1999 debut.

The U.S. currency weakened 1 percent to $1.5941 against the euro at 9:26 a.m. in New York, from $1.5790 yesterday. The dollar decreased 0.6 percent to 101.25 yen, from 101.83. The euro rose 0.4 percent to 161.43 yen, from 160.78.

The dollar has dropped 15 percent against the euro since September as the Fed cut the target lending rate 3 percentage points to 2.25 percent to protect the U.S. economy from the collapse of the subprime-mortgage market.

The yuan was little changed at 6.9962 per dollar after a report showed China's economy expanded 10.6 percent in the first quarter, underlining the strength of the nation's expansion as a slump in the U.S. drags down global growth.

Crude oil and the euro versus the dollar have moved in lockstep in the past year. The correlation coefficient between the two was 0.957. A reading of 1 indicates they always move in the same direction.

Dollar Falls to Record Against Euro