The forex trading headlines for Asia trading today
A deal on Cyprus was hammered out:
- Setting up a “good bank” and a “bad bank”
- Popular Bank of Cyprus, known as Laiki, will effectively be shut down
- Deposits below 100,000 euros in Laiki will be transferred to Bank of Cyprus
- Deposits above 100,000 euros in Laiki, which under EU law are not insured, will be frozen and will be used to resolve debt(the extent of depositor losses are still to be determined)
- Plan does not need the approval of the Cypriot parliament, but may need approval of the Bundestag
- Moody’s – Cyprus remains at risk of exit from the euro
- Moody’s – Cyprus crisis is a credit negative for all Euro sovereigns
- The Eurogroup Statement on Cyprus (PDF) (see page 3 ‘Annex’ for details)
- Japan PM Abe to hold talks with EU later today; to begin free-trade talks, but will also get an explanation of the Cyprus bail-out
- UK: Hometrack March Housing Survey +0.3% m/m (vs. 0.1% prior)
- UK: Hometrack March Housing Survey 0.0% y/y (vs. -0.1% prior)
The lack of progress on Friday and the weekend over the Cypriot bail-out-in saw EUR/USD move lower on early Monday morning, down to around 1.2940/50. EUR swung around, albeit in a narrow range, responding to rumours as they came of Brussels. It moved higher as more liquidity came into the market and then jumped on news that a resolution had been reached (details in bullets, above). It tested towards 1.3050, running into sellers there and settled into a very quiet rest of the day around 1.3030.
USD/JPY opened lower but almost immediately found bidders. It ticked higher through the course of Monday morning, jumping with EUR on the news of Cyprus agreement, running into offers above 94.90 and settling around 94.80.
AUD, GBP and NZD all had a relatively quiet session.
