The euro was only slightly weaker on Friday, even as a pivotal European Summit failed to produce a coherent plan to deal with the region’s deepening sovereign debt crisis.
This week’s collapse of the Portuguese government drove the nation’s borrowing costs to record highs, signaling that a bailout is in the cards.
However, with German and French officials facing political backlash back home, no resolution was reached.
Standard & Poor’s downgraded Portugal’s credit ratings by two notches on Friday, two days after Prime Minister Jose Socrates resigned over the rejection his austerity plan.
While there were more questions asked than answered at the summit, it is widely expected the European Central Bank will raise interest rates in April, giving the euro a measure of support.
The euro eased a bit to $1.4120 versus the dollar, but remained within hailing distance of a 4-month high of $1.4247 set earlier in the week.
The U.S. economy performed somewhat better in the last quarter of 2010 than had previously been estimated, according to figures released by the Department of Commerce on Friday.
According to revised figures, the U.S. gross domestic product, or GDP, grew by 3.1 percent in the fourth quarter of 2010, up from the previous estimate of 2.8 percent.
The euro remained little changed against the yen, holding near Y114.70.
Core inflation in Japan fell 0.3 percent on year in February, the Ministry of Internal Affairs and Communications said on Friday – declining for the 24th consecutive month.
Versus the sterling the euro edged to a fresh 4-month high of 0.8810 before pulling back slightly.