Cyprus Deal Pushes Euro Lower

Cyprus Deal Pushes Euro Lower

The euro (EUR) saw its largest drop in weeks against the US dollar (USD) moving from a high of 1.3047 to 1.2829. The single currency, currently moving just above 1.287 has come under pressure after yesterday's deal on Cyprus. The 'Cyprus Precedent', as the press dubbed it, made many analysts suggest that the restructuring of troubled economies banks will be solved similarly if done under the EU, ECB, IMF framework. This has caused jitters in Spanish, Italian and other southern European lenders which are heavily exposed to their sovereigns.

Gold (XAU) recovered after dropping to 1590 US dollars per ounce. The precious metal, currently moving above 1602 has been heavily influenced by recent European developments

The GER 30 (DAX) Germany's leading stock market index dropped to 7880 from a previous 8034 following news of another euro bail-out executed in line with German directions.

Weekly option volatilities for the EURUSD at 9.52 shows investors' fears subside and push options' premiums lower.