The week started off with range patterns dominating most major pairs and ended with the USD surging, bolstered by Fridays GDP report. “This is a Teflon market,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. “It wants to go up, and it doesn’t seem to be stymied by much lately” in reference to US equity markets, but the same holds true for the USD right now.  The dollar seems to be making all sorts of strides Friday with a particular surge against the Yen

EURUSD in particular seems to breaking out of its week long trend as uncertainty and the reality of the recovery takes hold.  The Euro decline seemed widespread as fears over Portugal and the fate of the currency weighed heavily throughout the week. EUR saw particularly steep declines against its European brethren, such as EURGBP and EURCHF throughout the week in anticipation of the Portuguese Parliamentary decision and the subsequent resignation of its Prime Minister.  The drama in Lisbon only seemed to be amplifying European debt fears Friday as the 17-member Eurozone council voted to extend the lending capacity of its bailout fund.

After a very volatile week last week, the USDJPY traded very tightly this week, with each subsequent day trading in an even tighter range than the day before.  That changed today though with the USDJPY reaching a high of 81.49 and next week could see a breakout in either direction.

Portugal’s Prime Minster Socrates resigned today after Parliament voted down his austerity plan, causing Portugal’s debt to be downgraded 2 steps by Fitch Ratings and its bond yield to jump to a record high. The 10 year hit 7.9% while the 5 yr touched 8.5%.

Also a catalyst for a rising Euro today is the Irish 10 year yield hovering above 10%. Even with much talk about the European Union debt crisis the Euro has continued to be supported by the bullish expectation of a rate hike in April.

Disappointing numbers from the US Durable Goods report were only able to keep the EURUSD under the tested resistance level of 1.4150 temporarily as debt concerns in Portugal outweighed the US sentiment.

In New Zealand, the expectation of greater copper demand coupled with an estimated 2% decrease in copper production for the rest of 2011 sent the NZD/USD to 0.7491.