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Forex Flash: EUR weakness explained – UBS

FXstreet.com (Barcelona) - In Cyprus, there are fresh indications that deposits greater than EUR 100k in two Cypriot banks will likely sustain larger losses than originally feared. According to Research Analyst Gareth Berry at UBS, “This may partly explain why the EUR/USD fell to a new 14-week low of 1.2771 overnight.” Meanwhile, a quarterly IMF survey released on Saturday probably did the euro no favors either.

The survey revealed reserve managers were net euro sellers during Q4 2012 (as we discuss in more detail below). In Japan, the USD/JPY traded heavy in the wake of a quarterly Tankan report and the official China manufacturing PMI - both of which came in on the soft side of consensus. The Tankan showed that large Japanese manufacturers see USD/JPY trading at an average of 85.22 during the current fiscal year which begins today.

Forex: EUR/USD erases daily losses ahead of US manufacturing data

The day started with a risk-off tone on suggestions that deposits over 100K in two Cyprus banks may be subject of more losses than the 30% tax previously thought, but the EUR/USD was able to bounce back from its low at 1.2772. The pair erased its gains back to the opening price, but is facing resistance there, which is keeping the market slightly on “red”.
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Forex: USD/JPY bounces to 93.70/75 ahead of US data

Corrective movements of the Yen ahead of BoJ meeting this week and the Chinese manufacturing PMI, as well as risk-off sentiment due to Cyprus, pulled the USD/JPY down to 93.28 low on the European opening. The market was able to retrace part of those losses back to 93.70/75 area, where it is currently sitting on ahead of US data.
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