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 President Nicos Anastasiades reached a tentative agreement with Troika in early Asian session for a 10 Billion euros bailout loan. The deal claimed to protect small depositors with deposits under 100,000 euros. Meanwhile, deposits above 100,000 will be subjected to losses up to 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. The deal was aimed to avert a substantial deposit withdrawals once the banks in Cyprus open tomoroow, which would otherwise lead to insolvency risks in the banking sector.
Despite the fear in Cyprus was partially dissipated, the reamining uncertainies on the exact amount of losses from uninsured deposits could add to the possibility of a Cyprus exit from the Eurozone.
Euro surged against most counterparts, led by the 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
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