EUR took advantage of the verdict to the Cyprus banking future

By GG Analyst in Reviews 0 Comment

EUR/USD

After a week of markets’ and investors’ tortures, Cyprus has eventually found what it can sacrifice to prevent the uncontrolled swift crash of its financial system. Frankly speaking, Cypriots agreed to a slow and gradual dying of their banking sector. You see, in exchange of €10bln from the international creditors (the EU, the IMF, the ECB) Cyprus makes the second largest creditor of the country – Laiki- a “poor bank”, which in addition to its own debts will get toxic debts of the Bank of Cyprus. Deposits above 100K won’t suffer restructing and won’t be taxed. However, big investors may lose more…

EUR is waiting for destiny

By GG Analyst in Reviews 0 Comment

EUR/USD

At present we know only that Russians are not going to provide financial aid to Cyprus. Supposedly, the refusal has followed the unwillingness of Cypriots to sell their assets on the conditions favourable for Russia. Cypriots now hope for revision of the terms of the preceding loan and, less likely, for a new one from Russia. It’s clear that the banks won’t unblock the money till the next week, thus the banks remain in a half-frozen mode. Under such conditions the banks get liquidity from the ECB’s channels, and this clearly vexes the CB, which is calling to take a decision more…

Waiting for real action

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday afternoon the market was trying to recover after the morning negative. The major incentive to purchase the euro was given by the news that Cyprus would like to reconsider the levy for investors with smaller deposits (up to €100K). A bit later we learnt that the EU also didn’t have anything against it. The only thing that worries the officials now is not to allow the total amount of money that Cyprus will allocate to keep its own domestic banks afloat go above the estimated 5.8bln. Besides, it is widely believed in the markets that Cyprus cannot be treated as more…

Cyprus bailout

By GG Analyst in Reviews 0 Comment

EUR/USD

The word “bailout” presupposes some aid, easing of the lot of the rescued. Earlier money allocations to the rescued Greece, Ireland, Portugal and Spain led to growth of the single currency, albeit the short-term one sometimes. Yet it is different with Cyprus, “rescued” last Saturday. EURUSD dropped by 1.5% after the EU’s decision to impose a one-off 9.9% levy on accounts with more than €100K. Smaller deposits will be taxed at 6.75%. Altogether, it should bring €5.8bln to the government of Cyprus. The EU will allocate another 10bln. Earlier it was calculated that Cyprus would need about 17bln, but the IMF more…

Spain takes Italy’s investors

By GG Analyst in Reviews 0 Comment

EUR/USD

All that Italy didn’t get went to Spain. Here we speak about the debt auction that was held in these countries on Wednesday and Thursday accordingly. EURUSD reacted accurately to the markets’ message. If on Wednesday it was decline due to the low investor demand, yesterday the single currency was brought back nearly to the same levels: it’s again trading a bit above 1.30. Yet, it’s worth mentioning that weakness of the dollar also contributed to sales of the euro. It arose on the decreased concerns that the high demand of the US households would boost price growth. As we see more…