USD Trading Outlook (19-03-2013)
Euro tumbles after depositors hit by Cyprus bail-out
| The euro (EUR) dropped 150 pips against the US dollar (USD) opening at 1.2950 in the Asian session. The pair continues to slide moving below 1.2890 as European markets near opening time. The move comes after Friday night’s decision by European leaders, the IMF and the European Central Bank to tap into depositor’s money as part of the Cyprus bailout program. The troika of lenders has agreed to a figure of EUR 10 billion, to which the Cyprus government will add a further EUR 5.8 billion taken from Cyprus bank depositors. The original deal involved a cut of 6.75% on deposits less than EUR 100,000 and 9.99% on deposits above that amount. The deal is expected to be approved this afternoon in the Cyprus parliament. At the same time contagion fears about deposits safety spread in other periphery countries most notably, Spain and Italy. |
