Closed in NY at $1.2873 after rate had been shoved to lows of $1.2844 following the Cypriot Parliament rejection of the Troika bank deposit levy, the move taking out barrier interest at $1.2850, with rate then recovering to $1.2923 on ECB comments that they would continue to provide funding for Cyprus before rate drifted back below $1.29 into the close. Rate continued to ease into early Asia, touching a low at $1.2857 before recovering to $1.2880 and settling between $1.2870/80 into Europe. Cyprus developments will continue to provide headline risk and has potential to overshadow this afternoon’s FOMC (1800GMT) with Bernanke to follow up with a press conference at 1830GMT. Data interest provided by Germany PPI at 0700GMT ahead of EZ current account at 0900GMT. Talk already suggesting Cyprus banks will remain closed until next Tuesday (another Cyprus bank holiday Monday) while discussions continue over a plan B and plan C. Euro-dollar demand now seen into Tuesday’s low at $1.2844, a break to open a deeper move toward $1.2835/25 ahead of $1.2800. Resistance $1.2880/85, $1.2900 ahead of $1.2920/30.
EasyForexNews Research Team