Weekly Euro Round-Up – What effect has the drama in Cyprus had?

  • The Euro began the week trading against the British Pound in the region of 0.8565

    Today the Euro is trading against the British Pound in the region of 0.8511


    Here we take a brief look at what's been happening with the Euro this week, and what could cause the Euro exchange rate to rise or fall in the week ahead. 

    Round-up for week ending 22/03/13

    The Euro has had a difficult week as concerns that the Eurozone crisis is entering a new phase grew, largely as a result of developments in Cyprus.

    Although the island nation hasn’t received as much press as the Eurozone’s more prominent members since the outset of the economic crisis, it dominated the news this week.

    With Cyprus on the verge of financial ruin the European Central Bank demanded that it take unprecedented steps in order to meet the terms of its bailout agreement.

    The proposal that Cyprus adopt a levy on bank deposits was met with widespread shock and the Euro plummeted against the US Dollar. The common currency also fell against the majority of its other currency rivals.

    With industry experts fearing that the proposal could set a dangerous precedent the Euro continued to fall as the week progressed.

    After the Cypriot parliament rejected the proposal by a unanimous vote the Euro slumped close to a four-month low against the US Dollar, but it later recovered some ground after the ECB pledged to support the struggling nation. 

    However, the Euro’s modest advances were wiped out on Thursday after disappointing manufacturing and services data for both Germany and the Eurozone added to concerns that the downturn in the currency bloc is intensifying. 

    The situation worsened further after Cyprus was dealt an ultimatum by the ECB. As it stands now, if the nation and central bank cannot reach an accord regarding a bailout agreement the island nation will be refused aid.

    Such a circumstance could result in Cyprus being forcibly ejected from the Eurozone, and this additional development in the saga led to fresh Euro declines.

    Although the common currency fell further still on Friday morning, following the release of a report detailing an unexpected drop in German business confidence, it quickly returned to its previous levels as the negotiations between Cyprus and the ECB continued.

     

    What to look out for next week:

    In the week ahead the most influential pieces of economic news for the Euro include Monday’s German ZEW retail sales figures, Wednesday’s French GDP data and Thursday’s German unemployment change statistics.

    Any developments relating to Cyprus or the Italian election will also be of particular interest.

    Exchanging Euros?

    If you have any questions regarding the Euro, or currency in general, please leave me a comment and I’ll get back to you as soon as I can!

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    Current Euro Exchange rates: 

    The Euro is trading against the Pound in the region of 0.8511

    The Euro is trading against the US Dollar in the region of 1.2929

    The Euro is trading against the Australian Dollar in the region of 1.2406

    The Pound is trading against the Euro in the region of 1.1750

    The US Dollar is trading against the Euro in the region of 0.7735

    The Australian Dollar is trading against the Euro in the region of 0.8068

     

    These exchange rates are provided by TorFX, a leading provider of foreign exchange. TorFX offers the best possible exchange rates for all your currency needs.

    These exchange rates were correct as of 11.26 am GMT on the 22/03/13