We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bullish
Gold
Mixed
GBP/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
More View more
Real Time News
  • Understanding the US-Mexico relationship and how the ebb and flow of economic activity in the former impacts the latter is crucial for trading USD/MXN. Get your $USDMXN market update from @ZabelinDimitri and @FxWestwater here:https://t.co/oCRV13zbF0 https://t.co/9VKH7CHB8Y
  • RT @DanielGMoss: $USDCNH: RSI registers oversold reading for the first time since the US-China 'phase one' trade deal in January. $USD $CNH…
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.94%, while traders in US 500 are at opposite extremes with 72.37%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/plFxRXM0uT
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.32% 🇨🇭CHF: 0.18% 🇳🇿NZD: 0.17% 🇦🇺AUD: 0.12% 🇨🇦CAD: 0.07% 🇯🇵JPY: -0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/7LQ64GzSvX
  • A macro forex trading guide exploring how to trade the Euro vs the Swedish Krona and Norwegian Krone through the prism of the Core-Perimeter model. Get your market update from @ZabelinDimitri here:https://t.co/n6zwlZJmGO https://t.co/rYkYIIVNQJ
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: Germany 30: 1.47% France 40: 1.18% FTSE 100: 0.78% US 500: 0.20% Wall Street: 0.17% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/UJ2NbRFbDk
  • RT @DanielGMoss: Market Snapshot Haven-associated $USD and $JPY notably declining during #APAC trade as the risk-sensitive $AUDUSD and #SP…
  • The Core-Perimeter trading model helps traders understand interactions between global economies, helping to trade the assets embedded in these relationships. Get your market update from @ZabelinDimitri here:https://t.co/dKRAo00lfA https://t.co/jjRBxBZs1z
  • What is the #USD #ASEAN technical road ahead? Check out my latest update below! $USDIDR $USDPHP $USDMYR $USDSGD https://www.dailyfx.com/forex/technical/article/special_report/2020/07/09/US-Dollar-Technical-Outlook-USDIDR-USDPHP-USDMYR-USDSGD.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/ByH56TCUdj
  • The US Dollar is pressured as rising coronavirus cases fail to dent 2021 GDP bets. Could the Singapore Dollar, Indonesian Rupiah, Philippine Peso and Malaysian Ringgit rise? Find out from @ddubrovskyFX here:https://t.co/u1qhaIGGoC https://t.co/O2i6DZLkIB
Euro Unimpressed by Cyprus Deal as Capital Flight Fears Linger

Euro Unimpressed by Cyprus Deal as Capital Flight Fears Linger

2013-03-25 06:05:00
Ilya Spivak, Head Strategist, APAC
Share:

The Euro has shed earlier gains and now trades little changed after Cyprus and the EU agreed to a bailout deal as capital flight fears continue to linger.

Talking Points

  • Euro Yields Tepid Response to Cyprus Bailout Deal as Capital Flight Fears
  • Japanese Yen Declined as Stocks Rose in Asia, Denting Safe-Haven Demand

The major currencies are little changed in overnight trade. The Japanese Yen is broadly underperforming as Asian stocks advance, sapping demand for the regional haven currency. The MSCI Asia Pacific benchmark equity index has added 0.9 percent after Cyprus and the so-called “troika” (EU/ECB/IMF) agreed to measures paving the way for launch of the country’s bailout program. The Euro spiked higher as the news of the deal emerged but the single currency has since retreated as worries about the impact of the Cyprus fiasco on depositor confidence elsewhere in single currency bloc continue to swirl.

The package of measures emerging out of the weekend’s negotiations focuses most specifically on Laiki Bank, Cyprus’ second-largest lender. The bank will be split, with unsecured deposits (all those over €100,000) transferred to a so-called “bad bank” and eventually wound up. Losses to unsecured depositors from this move are being estimated at 30-40 percent. Secured deposits and performing assets will be moved to Bank of Cyprus. This process is expected to raise €4.2 billion. The Cypriot government will further use privatization and taxation to generate additional funding to move toward unlocking €10 billion in EU aid, a process expected to conclude by mid-April.

On balance, investors’ lack of enthusiasm for the bailout seems reasonable. The critical issue remains that of precedent for larger Eurozone countries, and the way in which the Cyprus situation has been managed does not seem to inspire a great deal of confidence. Depositors in countries with similarly sickly banking sectors (notably Spain) are unlikely to be greatly encouraged by the prospect of losing close to a third of their deposits over €100k with the EU’s blessing if trouble were to arise. Cyprus’ introduction of capital controls to prevent a bank run when lending institutions reopen for business, again with approval from Brussels, is unlikely to sit well also.

This raises the most important question of all: why should a depositor in Spain or a country similarly vulnerable to a banking crisis expect to be left unscathed if a Cyprus-like calamity were to befall them. If such an expectation is deemed unreasonable in light of today’s events, the depositor in question may well opt not to keep money in the Eurozone altogether, and he/she may not be alone. This leaves the markets waiting to see if a mass exodus of capital does indeed occur as the region digests the latest news-flow, for then the worst-case scenario will be upon the Eurozone whether or not Cyprus receives its aid.

Asia Session:

GMT

CCY

EVENT

ACT

EXP

PREV

0:01

GBP

Hometrack Housing Survey (MoM) (MAR)

0.3%

-

0.1%

0:01

GBP

Hometrack Housing Survey (YoY) (MAR)

0.0%

-

-0.1%

Euro Session:

GMT

CCY

EVENT

EXP/ACT

PREV

IMPACT

9:00

EUR

Italian Consumer Confidence Index (MAR)

85.2 (A)

86.0

Low

9:30

GBP

BBA Loans for House Purchase (FEB)

30506 (A)

31983 (R-)

Medium

10:00

EUR

Italy to Sell 2014 Bonds, 2018-23 I/L Bonds

-

-

Medium

Critical Levels:

CCY

SUPPORT

RESISTANCE

EURUSD

1.2915

1.3084

GBPUSD

1.5181

1.5263

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, please CLICK HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.