EUR/USD – The euro continued to slip against the dollar through most of the morning but found some support near the 1.4100 level. There was some disappointment for euro bulls on the news that the final decision on the European Union bailout fund would be delayed until the end of June at the earliest.
Many traders, as well as citizens of the euro area, had hoped that final agreements and arrangements for the fund could be made during the EU Economic Summit that is starting in Brussels tomorrow. Also adding some weight to the common currency was fear that a political crisis in Portugal could push the debt-laden country into seeking a bailout as no agreement on austerity measures can be found on the horizon.
From a market perspective, things are not overly euro negative. While there has been a small correction over the last couple of days, considering the level the euro was trading at versus the dollar earlier this week, this recent drop could be of minor consequence if traders see it as a buying opportunity. Even if pressure continues and the euro slips a bit farther, there seems to be a strong level of support near 1.4000, particularly as long as speculation surrounding a European Central Bank rate hike remains strong. A lot of situations can develop prior to the ECB’s April 7 meeting though, and if the 1.4000 level is taken out, a slide to 1.3850 on prolonged negative news is not out of the question.(DANCOOK/Forbes)