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Dollar off highs vs. euro with Cyprus in focus

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Investing.com - The U.S. dollar pulled back from three-month highs against the euro and pared losses against the yen on Monday but investors remained wary following news that a levy was to be imposed on bank deposit holders as part of a bailout deal for Cyprus.

During U.S. morning trade, the dollar was sharply higher against the euro, with EUR/USD down 0.92% to 1.2955, after falling to a three-month low of 1.2882 earlier Monday.

The single currency weakened broadly following news that a once-off tax was to be imposed on bank deposit holders as part of a EUR10 billion bailout deal for Cyprus.

The agreement marked the first time since the onset of the euro zone debt crisis that depositors have been forced to take a haircut in return for financial aid and triggered a run on cash machines in Cyprus over the weekend.

Market sentiment found support following reports that a parliamentary vote on the levy was to be postponed until Tuesday amid reports that the government was preparing a new deposit tax proposal to lessen the impact on smaller depositors.

The dollar pulled away from session lows against the yen, with USD/JPY down 0.37% to 94.95, after falling as low as 94.09 earlier in the trading day.

The dollar was little changed against the pound, with GBP/USD dipping 0.01% to 1.5109.

Elsewhere, the dollar gained ground against the Swiss franc, with USD/CHF rising 0.67% to 0.9451.

The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD up 0.24% to 1.0218, AUD/USD sliding 0.19% to 1.0392 and NZD/USD falling 0.39% to 0.8243.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.56% to 82.81.

The eurogroup of euro zone finance ministers was to hold a teleconference later Monday to discuss the situation in Cyprus.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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