CURRENCIES: Euro Slips Further On Cyprus Woes, Dollar Gains
By Wallace Witkowski and Sara Sjolin, MarketWatch
SAN FRANCISCO (MarketWatch) -- The euro slipped below $1.29 Tuesday following reports that Cyprus's finance minister
resigned as the Mediterranean island nation struggles with how to go about with its bailout.
The euro (EURUSD) fell to $1.2888, compared to $1.2954 in late trading Monday, as the shared currency fell further
after a report Cypriot Finance Minister Michalis Sarris offered his resignation.
Also, other reports said that the country's ruling party led by Cyprus President Nicos Anastasiades plans to abstain
from a parliamentary vote on its European Union bailout. See the latest developments on Cyprus.
The vote, scheduled for Tuesday evening after being postponed, includes a controversial levy on bank deposits,
although rumors say the approval could be postponed to later this week.
Still, "sentiment does seem to have improved in the markets after yesterday's bloodbath," according to IG Markets
chief market strategist Chris Weston. See related commentary: Why market shrugged off Cyprus crisis
The Cyprus woes further weighed on most European stock markets.
The dollar index (DXY), which measures the greenback against a basket of six other currencies, traded at 82.886, up
from 82.639 in late North American trading on Monday and well above 82.277 recorded late Friday.
The WSJ dollar index , which measures the greenback against a slightly wider currency basket, rose to 73.62 from 73.49
The dollar's moves came as data for U.S. housing starts showed a 0.8% rise in February, with longer-term trends
signaling a housing market that continues to strengthen.
Meanwhile, U.S. stocks fell into the red following an initial advance on Tuesday.
Investors also trained their attention on the ZEW Indicator of Economic Sentiment in Germany, showing a 0.3 point to
increase to 48.5 points in March.
Against the Japanese yen (USDJPY), the dollar reached 95.91 yen, up from Yen95.21 in late North American trading
The British pound (GBPUSD) traded at $1.5114, rising from $1.5106. The Office for National Statistics said the
Consumer Price Index rose by 2.8% in February on an annual basis, up from 2.7% in January. The uptick comes after four
consecutive months where the index stood at a 2.7% level.
The Australian dollar (AUDUSD) slipped to $0.9652, representing a 0.3% loss, according to FactSet data.
Minutes of the Reserve Bank of Australia's last meeting -- where the central bank kept its key rate on hold at 3% --
were released Tuesday.
"The minutes are historical, and recent events in Cyprus provide a reminder of the still-compromised banking systems
in parts of Europe and the fragile nature of confidence more generally," said RBC Capital Markets strategist Su-Lin Ong.
Still, the minutes showed that the RBA's message remains unchanged, she said.
"Firmly in wait-and-watch mode, it expects its policy actions to gain further traction," she said.
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