The Euro erased the gains it made against the US Dollar and could weaken further as concerns over the aftermath of the Cypriot bailout begin to worry the market.
Investors are worried that despite the deal it won’t be enough to eliminate the threat of the small nation defaulting or the possibility of contagion spreading throughout the Eurozone.
Gregg Gibbs a senior currency strategist at RBS said; “After the initial bounce in the Euro on the deal, it may well begin to slide as the market now worries about what will happen when Cyprus banks reopen for business. Striking workers could delay this, and we may yet see the spectre of an attempted bank run. We see little sustained upside in the Euro on this deal.”
The situation has damaged confidence in banks right across Europe with depositors concerned that their savings could become a legitimate target for governments in times of need for other bailouts.
“The overarching concern is capital flight and not just from Cyprus,’ said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce. ‘ This deal underlines the structural problems in the Euro region. I wouldn’t be surprised to see the Euro fall unless policy makers do something else to shore up confidence.”
To prevent a bank run in Cyprus reports today suggest that Cypriot banks have limited the amount of cash available to be withdrawn from cash machines to just €120.
Current Euro Exchange Rates
As of 09:40 am
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8550
The Euro to US Dollar exchange rate is currently trading in the region of 1.3010
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2426
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5567
The Euro to Canadian Dollar exchange rate is currently trading in the region of 1.3276
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