Investing.com -- EUR/USD fell considerably on Friday extending recent losses, as the German parliament cleared the way for a new round of bailout talks with Greece and strong U.S. inflation data bolstered hawkish arguments for a September interest rate hike by the Federal Reserve.
The currency pair wavered between a low of 1.0828 and a peak of 1.0907 before settling at 1.0831, down 0.41% on the session. The euro ended the week down more than 2.7% against its American counterpart, after closing lower in four of the last five sessions.
EUR/USD likely gained support at 1.0818 the low from April 27 and was met with resistance at 1.1218, the high from July 10.
In Berlin, the German Bundestag approved a new series of Greek bailout negotiations in a 439-119 vote on Friday. Of the 119 no votes, 60 came from chancellor Angela Merkel's CDU/CSU voting bloc.
At the same time, the European Union approved €7.16 billion in short-term bridge financing to Greece that could allow banks throughout the nation to reopen next week.
"The loan will have a maximum maturity of three months and will be disbursed in up to two installments. It will allow Greece to clear its arrears with the IMF and the Bank of Greece and to repay the ECB, until Greece would start receiving financing under a new program from the European Stability Mechanism (ESM)," the European Commission wrote in a statement.
The bridge financing opens the path for the two sides to resume negotiations on a bailout program that could provide Greece with up to €86 billion over a period of three years.
Separately, the U.S. Department of Labor's Bureau of Labor Statistics said on Friday morning that its Consumer Price Index (CPI) rose by 0.3% in June on a monthly basis, in line with consensus estimates. On a year-over-year basis, the CPI gained 0.1% above analysts' forecasts for a flat reading.
A reading of Core CPI, which strips out food and energy prices, provided even more optimism for the hawks at the Fed in favor of an imminent rate hike. The core reading, which the Fed believes provides a more accurate gauge of inflation, rose 0.2% from May and 1.8% over the last 12 months. Analysts expected gains of 0.1% and 1.7% respectively.
More critically, energy prices rose by 1.7% on the month on the back of a 3.4% increase in gasoline prices. Over the last few weeks, the Fed has strongly hinted that it could raise rates if it received indications that temporary drags from lower energy prices subsided. It has been nearly a decade since the U.S. Central Bank has hiked its benchmark Federal Funds Rate.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, surged to a six-week high of 98.10.