Despite Pressures EUR/USD Holds Steady

In light trading due to the Good Friday holiday, the Euro once again held close to a multi-month low against the greenback as investors consider the potential risks to the Eurozone banking system as a result of the controversial bailout terms for Cyprus and the growing uncertainty stemming from Italy’s political deadlock. Yesterday, Cypriot banks reopened after having been closed nearly two weeks, and while bank withdrawals were kept to a minimum, the government did confirm that they would be keeping tight capital controls enforced for an extended period of time.

As reported at 10:41 a.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.2813, not far from late trading overnight in New York, and on track to close out the first quarter o the year with a nearly 3% loss. Currency analysts expect that negative news directly out of the Eurozone is what will weigh most heavily on the common currency; indeed, news that there appears to be military action from North Korea has not affected the Euro too much as the pair was more recently trading at 1.2828 and remains within a tight trading band. The U.S. Dollar Index was lifted to a fresh 8-month peak and stood earlier at 82.998 .DXY; the Index is a gauge of the greenback’s value relative to a weighted basket of major rivals which includes the Euro.