International Business Times reports the USD rallies against the Euro on strong inflation.
"The dollar rose against major currencies on Friday after stronger-than-expected US consumer inflation. Larger-than-forecast numbers on inflation and retail sales have changed the outlook for the US economy and the chance of aggressive Fed interest-rate cuts. The central banks liquidity plan may help alleviate credit market concerns and help the Fed to address the credit crunch without additional rate cuts. Despite lower equity prices, the yen fell as a Bank of Japan survey showed business confidence declined for the first time since March.
The EUR/USD declined the most since May 2005 on speculation the Fed will not cut interest rates as aggressively as earlier thought. After breaking the 1.45 support, the pair is trading below that level, which now acts as resistance. This important resistance is the neck-line in a head-and-shoulder top, indicating further drop in the pair. "
