Currency Updates:
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.
The US dollar (USD) is trading lower against the Japanese yen (JPY) as a series of positive economic data in the United States over the past week appear to give the Federal Reserve no incentive in embarking in another round of quantitative easing.
Euro (EUR) is falling against the Swiss franc (CHF). The pair has had a floor set by the Swiss National Bank (SNB) at 1.2000, however the economic environment favors capital flows to the stable and independent nation of Switzerland. If the single currency continues to strengthen then traders should expect an intervention by the SNB.
The British pound (GBP) is weakening following 2 weeks of strengthening mainly backed by comments from the Bank of England governor and better than expected data releases.
GOLD (XAU) is falling after it rose as high as 1613.59. It is now trading just above 1605 US dollars (USD) an ounce. Nevertheless the precious metal is in an uptrend and investors around the globe are considering its safe haven characteristics – especially following the deal on Cyprus
