Euro ETF Tumbles on Cyprus Levy

ETF Trends

CurrencyShares Euro Trust (FXE) fell nearly 1% in Monday’s premarket trading on anxiety over a levy on bank deposits in financially troubled Cyprus.

The euro was down against the U.S. dollar by the most in over a year amid reports Cypriots were lined up at cash machines to withdraw funds.

“The measure makes people nervous that this may happen to other countries in the future and there could be a flight of capital out of the region,” said Mansoor Mohi-uddin, head of currency strategy at UBS, in a Bloomberg News report.

A parliamentary vote on the measure central to a bailout was postponed until Monday, Reuters reported. “The originally proposed levies on deposits are 9.9% for those exceeding 100,000 euros and 6.7% anything below that,” according to the story. “The Cypriot government on Sunday discussed with lenders the possibility of changing the levy to 3.0% for deposits below 100,000 euros, and to 12.5% for above that sum.”

The euro currency ETF was down 1.1% year to date as of March 15, according to Morningstar.

CurrencyShares Euro Trust

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euro-etf-cyprus

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