Euro is heading lower against its major counterparts today, thanks in large part to uncertainty over the vote in Cyprus. Once again, questions about the euro’s stability are being raise, and that is weighing on the 17-nation currency.
Voters in Cyprus are heading to the polls to determine whether or not they are in favor of a levy on retail bank deposits. The measure is meant to raise money so that Cyprus can meet requirement for another round of bailout funding. If the measure fails, there are concerns about sovereign debt. However, there have been worries that passage of the levy could lead to a run on banks in Cyprus, and that could ripple out to the rest of the eurozone banking sector.
In either case, the ECB has announced flexibility, in the hopes of proving that it will uphold the stability of the euro above all. This pledge is probably limiting losses to the euro. However, euro continues to struggle against its major counterparts, and probably will until there is a little more clarity in the matter.
At 15:10 GMT EUR/USD is down to 1.2938 from the open at 1.2958. EUR/GBP is down to 0.8566 from the open at 0.8578. EUR/JPY is down to 123.0050 from the open at 123.4750.
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