USD Trading Outlook (26-03-2013)

The euro (EUR) is weakening against most of its major counterparts early in the European session, as market participants worldwide are trying to digest the Eurogroup deal on Cyprus. The small island, comprising just 0.2% of the Eurozone’s Gross Domestic Product (GDP), had been trying to put together a solution to gather 5.8 billion EUR after its parliament rejected an unprecedented plan to tax depositors. The conclusion to this modern age tragedy came last night in an agreement that sets a precedent on deposits haircut. The single currency initially recorded a daily high at 1.30478 against the US dollar (USD) but is now trading below the psychological level of 1.3000.