By: Barbara Zigah
As the second quarter of the year began, the pressure on the common currency Euro continues with the EUR/USD pair holding close to a recently struck 4-month low on growing worries that the bailout terms for Cyprus have set a dangerous precedent for the other troubled Eurozone nations which might decide to consider similar terms for future bailouts.
Italy’s political uncertainty is also weighing on the Euro as investors worry over the possibility that the current political impasse might not be breached. According to the Cyprus central bank, depositors who hold in excess of €100,000 could stand to lose as much as 60% of their savings, a significantly greater loss than the original 30% or 40% that had initially been discussed.
As reported at 10:09 a.m. (JST) in Tokyo, the EUR/USD was trading nearly 0.1% lower at $1.2801, not straying far from Wednesday’s low of $1.2750. Since a 14-month high was struck in February at $1.3711, the pair has steadily declined with major support now being seen at around $1.2680 and currency strategists say that a break at that level might result in the retest of the 2012 low of $1.20.
The EUR/JPY pair was also trading close to a 1-month low at 119.745 Yen, well off February’s 3-year peak of 127.71 Yen.