The Euro fell to its lowest level in 14-months against the US Dollar, a two-week low against the Japanese Yen and weakened against the majority of its peers as the proposed levy on Cypriot bank deposits continued to exacerbate the Euro Crisis.
“The biggest fear right now is that there could be a domino effect, which is pushing the Euro down,” Douglas Borthwick, a managing director and head of foreign exchange at Chapdelaine & Co. “What the market doesn’t understand is that people who take out money may still put it elsewhere in the Euro zone, so I would argue that it’s not Euro-negative.”
The threat of contagion is the main concern for the markets as worries mount that the taxation of citizens savings, formerly once believed to be sacrosanct could be implemented in other European nations, a move that would surely spark unrest and anger.
“If this tax is levied it will set a precedent. It raises questions over whether other deposits will be safeguarded in other countries,” said Jane Foley, senior currency strategist at Rabobank.
“Euro zone politicians will be at pains today to manage down the danger of contagion to other (peripheral) markets. The euro will find a little bit of support from that but markets will remain jittery.”
Against the Pound the single currency tumbled by 0.96%, against the US Dollar by 0.93% and 0.78% against the Australian Dollar.
Current Euro exchange rates
As of 15:20 pm
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8557
The Euro to US Dollar exchange rate is currently trading in the region of 1.2940
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2469
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5705
Pound Sterling to The Euro exchange rate is currently trading in the region of 1.1667
US Dollar to The Euro exchange rate is currently trading in the region of 0.7727
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