As we being the final session of the week the euro catches a bid
against the U.S. dollar after euro zone leaders announced it will
allow some of the troubled counties like France, Spain and Portugal
to take additional time to lower their respective budget deficits
easing some of the burden of austerity.
[caption id="attachment_59552" align="alignright" width="300"
caption="The EU parliament building in Brussels"]
News Brussels meeting that leaders were looking at possible
bailout package for Cyprus also help to send the euro higher. The
euro zone leaders and International Monetary Fund officials hope to
have an outline for the Cyprus bailout by end of the day.
On the other side of the pair the U.S.'s final week's economic
data came in mixed with Empire State manufacturing index falling
less than expected. Expectations were for the index to fall
8.4 but rather printed and impressive 9.4 only 0.06 off the
previous month's 10.
Also released today was the Core Consumer Price Inflation (CPI)
the core excludes food and energy which climbed 0.2% for February
on top of last month's increase 0.3%.
Consumer Price Inflation also damped sentiment with 0.7%
increase compare to analysts' expectations of an increase of 0.5%
after the previous month of 0%.
the news out the euro zone seems positive on the headlines but when
market participants really think about and pull the emotion out the
news is not all that positive. If these countries need more time to
get their house in order it is only going to prolong the issues and
make these countries more vulnerable to additional downsides and
You can see this reaction in the daily chart of the EUR/USD
price action pierced the downward trendline that begun at the
beginning of year and rapidly pulled back below the line putting
the bears back in charge.