By Joseph Adinolfi, MarketWatch
ICE Dollar Index closes lower for fourth straight week
NEW YORK (MarketWatch) — The euro closed higher against the dollar Friday, but finished lower on the week, after the Eurogroup announced it had agreed to a four-month extension of Greece’s bailout.
The shared currency (EURUSD) traded at $ 1.1377, down from its session high of $ 1.1430. It had traded at $ 1.1369 Thursday. Greece’s bailout agreement is set to expire on Feb. 28. The shared currency recorded a 0.1% weekly loss against the U.S. dollar.
The euro has fluctuated within a tight range during the past week amid premature reports of progress and sometimes- contradicting statements from the finance ministers participating in the talks.
The extension isn’t yet final. According to the agreement, Greece must submit a list of reform proposals to its troika of lenders — the European Commission, the European Central Bank and the International Monetary Fund.
Should it fall through, Greece would have little more than a week before its EUR240 billion ($ 273 billion) bailout expires Feb. 28. The government could run out of money to fund its operations and pay creditors, which could in turn force it from the eurozone.
Read: This is the eurozone risk investors are ignoring (http://www.marketwatch.com/story/this-is-the-eurozone-risk- investors-are-ignoring-2015-02-19)
Kathy Lien, a managing director at BK Asset Management, wrote that the euro’s lackluster reaction is a sign that the market was disappointed by the agreement’s lack of detail, which she said leaves room for another breakdown.
“We have long been optimistic that an extension will be made and we still believe that both parties will reach an agreement to restructure Greek debt avoiding a Grexit but we along with the broader market are not happy that the can has been kicked down the road,” Lien wrote in a Friday afternoon research note, referring to a Greece exit from the European Union.
The ICE U.S. Dollar Index (DXY), a measure of the dollar’s strength against a trade-weighted basket of six currencies, finished lower for the fourth week in a row. The index was down 0.05% to 94.3490.
The dollar (USDJPY) finished the session at 119 yen, unchanged from Thursday’s close, because of the market’s focus on Greece Friday, rather than the U.S. economy.
Elsewhere, the British pound traded lower after data showed that U.K. retail sales declined by a larger-than-expected margin in January, giving up most of its gains from earlier in the week. The pound hit its highest level since the beginning of the year on Wednesday, after U.K. wage-growth surprised to the upside, and the Bank of England said it believes inflation will have risen by the end of the year.
The pound (GBPUSD) traded at $ 1.5399, compared with $ 1.5417 Thursday.
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(END) Dow Jones Newswires 02-20-151727ET Copyright (c) 2015 Dow Jones & Company, Inc.