Market News
March 19, 2013 @ 9:24 pm

Euro tumbles to 4-mth low below $1.29 as Cyprus continues to rock markets

Currency markets were volatile on Tuesday, especially during the North American trading session in the build-up to the Cyprus Parliament vote on the EU bill on a bank deposit levy.

The euro fell sharply to a three month low against the dollar touching an intra-day low of $1.2841, down 0.8 percent from the day’s open level.

The EURUSD pair stopped declining after the results of the vote which showed the Cypriot government rejected the bill.  Also the European Central Bank announced it will continue to provide liquidity to banks in Cyprus. This added support to the euro, which managed a bounce to $1.2880 in late US session trading.

Cypriot President Nicos Anastasiades failed to gather enough support in his parliament for the legislation imposing a levy on private depositors, a key demand of the EU in return for a rescue package of 10 billion euros to prevent a financial collapse in Cyprus.

At a Eurogroup meeting on Friday, EU finance ministers agreed Cyprus must raise 5.8 billion euros  as a condition for a bailout.

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