Euro feels the heat versus Dollar on persistent Cyprus Concerns

The Euro today dropped as against most of its major counterparts, following a statement by a Swiss bank, Pictet & Cie, that said that the Cyprus crisis has "tarnished" the attractiveness of the Euro region.

 

The risk that there will be a bail -in by depositors in any future banking crises in the region has been brought to the foreground after the precedent set by Cyprus and the markets are bound to reflect that.

Cyprus could announce the types of capital controls it plans to implement today. Leaders are attempting to prevent cash outflows once the nation's banks reopen.

The banks have been closed since the announcement of a plan by the European Union (EU) that would force losses on some bondholders and depositors. The losses would be incurred in exchange for a 10 billion-Euro bailout.

Today Italy plans to hold an auction to sell as much as 7 billion Euros of Debt.

Taking into account the Cyprus uncertainty and also the current political uncertainty in Italy, the Euro is set to remain under pressure in the near term.

The Euro earlier dropped 0.2% to $1.2831 and was 0.2% lower at 121.26 Yen.

 

The Yen has fallen 0.1% to 94.51 per Dollar ahead of Bank of Japan (BoJ) Governor Haruhiko Kuroda appearing in parliament on Thursday. Kuroda had told lawmakers on Tuesday, that he is targeting for 2% annual inflation in 2 years.