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Merkel and Troika reject Cyprus’s ‘Plan B’

FXstreet.com (Barcelona) - Chancellor Angela Merkel told German lawmakers in the European morning that Cyprus’s proposition to nationalize pension funds in order to prop up its finances was unacceptable. She insisted that Cyprus should rather concentrate on debt sustainability and bank restructuring in order to secure a bailout. She also added that she would like the country to remain in the Eurozone.

Meanwhile, it is possible that the Troika has already rejected Cyprus’s proposition to create an investment solidarity fund, as a way to raise funds required to finalize the bailout negotiations. The EU, ECB and IMF are said to have objections as far as the nationalization of state pension funds is concerned as well as the use of revenues from the country's natural gas reserves as collateral.

According to a source close to the negotiations: “There was some discussion of going back to the original plan of a bank levy, but there are objections from the central bank.”

Cyprus government’s spokesman Christos Stylianides is due to make an official statement on the situation around noon local time.

Forex: USD/JPY at 94.50 while officials talk about Cyprus

The USD/JPY extended its downside to 94.20 low as the European session opened and the IFO March survey showed disappointing figures in Germany. The pair has been able to bounce back to 94.50 while investors are kept on their toes in regard to Cyprus.
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Forex: USD/CHF down ahead of Cypriot Parliament vote

The USD/CHF is down to 0.9445 as the European session unfolds as the market tries to extend the downside. Investors are pricing in expectations regarding what is coming from Cyprus as the Parlia-ment prepares to vote on some kind of solution today before the end of ECB help on Monday. “The Cypriot parliament are due to vote today (latest headlines suggest this evening) on measures such as capital controls and the bank bills but as yet there does not appear to be a comprehensive plan B in place”, wrote TD Securitites analysts.
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