Cyprus bailout spooks traders and causes the Euro to plunge

Eurozone bailout of CyprusThe financial turmoil in Cyprus has taken a toll on most of the major currencies in the world. The sad thing is that these ripples do not look like they are going to calm down any time soon. This week on Monday, March 18, the Euro took a dive after the announcement of the bailout plan for Cyprus.

One of the measures that are being put in place to facilitate this bailout is the taxation of bank deposits. This move has been seen by investors and traders as a high-risk move that may have an effect on other trading platforms and Eurozone area banks.

Finance ministers in the Eurozone are said to have confirmed that taxation on bank deposits is one of the conditions that are being placed on Cyprus: an implementation that will facilitate the 10 billion Euro bailout. There were talks on Monday that the terms of this proposal could be changed to mitigate some of the effects that this proposal could have on binary trading, stocks and the economy of the Eurozone.

Due to the fears of some of the investors and forex traders, there was a major sell-off of the common currency, and this is what caused the plunge that was experienced.

The trading results that were announced at 11:25 A.M (JST) in Tokyo, Japan showed that the EUR/USD paid had shed as much as 1.4% from the late day trading of Friday, March 15. This translates to a drop of the price to $1.288 a piece. A price as low as this was last seen in early December 2012.

Right before the announcement of the bailout, the pair was trading at $1.289. The effects were also felt on the EUR/JPY pair, which fell further than the EUR/USD pair to trade at a loss of 2.2% at 122.20 Yen.

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Thursday, March 21st, 2013 europe, news

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