The Takeaway: Cyprus reached a tentative agreement with Troika that protects deposits below 100,000 euros -> Fear of an exit of Cyprus was dissipated -> Euro surged against most counterparts
Cyprus reached a tentative agreement with Troika in early Asian session that claimed to protect small depositors with deposits under 100,000 euros. Officials said uninsured deposit loss in Bank of Cyprus will be limited to be under 40 percent. The solution to the Cyprus deadlock has safeguarded investors’ confidence and quelled the fear of an exit of Cyprus out of the Eurozone. Yet, the scale of the comeback of the euro suggests that the accord did not take the market by large surprises as some investors have expected a deal to be concluded in the last minute.
Euro surged against most counterparts, led by an increase of 0.77 percent versus the yen and 0.27 percent versus the US dollar at the time of writing.
EUR/USD 1 Minute Chart
Chart Created by Robin Leung using Marketscope 2.0