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Forex Flash: EUR shorts rose on Cyprus concerns last week – Rabobank

FXstreet.com (Barcelona) - The euro continues to navigate the lower end of today’s range in the proximities of 1.2850/55, after printing fresh 2013 lows in the area of 1.2830 on increased uncertainties on Cyprus.

In the view of Jane Foley, Strategist at Rabobank, Italy and Cyprus continue to weight on the single currency. “. While tensions last week remained contained, concerns about the potential impact on depositors elsewhere in the Eurozone combined with uncertainties connected with the Italian political situation should ensure that jitters remain”.

In addition, “While some of the tension had abated by the end of the week, the legacy of Cyprus’ bail-in could keep the USD well supported”, Foley concludes.

Forex: EUR/USD testing fresh 2013 lows

The shared currency is bouncing off 2013 lows around 1.2830 on Monday, as Cyprus woes continue to weight on sentiment. ..
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Forex Flash: Recapitalization effort under way in Cyprus – Deutsche Bank

The new deal in Cyprus, which has been approved by the 17 Eurozone finance ministers as well, will see Laiki split into a "good" bank and a "bad" bank. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “The good bank will be folded into the Bank of Cyprus (BoC) while the bad bank will be wound up over time. BoC will assume €9.0B of Laiki's ELA liabilities, and will be recapitalized through a deposit-to-equity conversion of uninsured deposits such that a capital ratio of 9% is achieved.”
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