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Currency Updates:
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. |
- Gold (XAU) moved higher against the background of a hit on depositors in a member of the Eurozone, as uncertainty over the euro looms and banks in the Eurozone open.
- Weekly option volatilities for the EURUSD jumped from 9.00 to 11.50 as markets edge towards fear and push options’ premiums higher.
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EURCHF
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The euro (EUR) opened lower against the Swiss franc (CHF) at 1.2180 from 1.2270 of Friday as markets incorporate the news from Cyprus. Many investors expect a shift of deposits away from the euro and into safe haven assets such as gold and the Swiss franc. |
OUTLOOK?
Pivot
Preference1
Sentiment2
EURUSD
1.2980
SHORT @ 1.2980
USDJPY
95.00
SHORT @ 95.00
GBPUSD
1.5065
LONG @ 1.5065
AUDUSD
1.0395
LONG @ 1.0395
GOLD
1590
LONG @ 1590
OIL
91.90
LONG @ 91.90
US 500
1549
SHORT @ 1549
UK 100
6385
LONG @ 6385
1data generated by Trading Central™, 2data obtained from easy-forex Inside Viewer™
CALENDAR?
Currency
Time (GMT)
Event
Forecast
EUR
10:00
Italian Trade Balance
2.11B
EUR
11:00
European Trade Balance
10.4B
CAD
13:30
Foreign Securities Purchases
7.85B