The euro was trying resisting the forces that were pulling it down, but was largely unsuccessful, falling against other major currencies. This was not a straight move down though and the week ended on a bright note.
As it was predicted, the week was not an easy one for traders. The euro was up one day and down the very next. Yet not everything was completely bad as the general direction of the movement was clear: down. Bounces were far smaller than losses and did not halt the downfall in any noticeable way. The week ended with gain and optimism for the currency though, meaning that the continuation of the drop is not certain.
Cyprus remained the major reason for euro’s woes. The country received its bailout, but terms of the rescue package, which included losses to private sector, made investors uncomfortable. Concerns eased somewhat by the weekend, but by no mean have gone away completely. Sure, the country’s financial system is not going to collapse (not yet anyway) and measures were instituted to prevent a massive flight of capital from banks. Yet problems remained and the said measures to prevent capital outflows were considered to be too restrictive by most market participants.
EUR/USD fell from 1.2946 to 1.2819 and EUR/JPY declined from 122.19 to 120.70 this week. EUR/GBP wend down from 0.8493 to 0.8434.
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