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Forex - Dollar mostly higher, euro down on Cyprus tax rejection

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Investing.com - The U.S. dollar is trading higher against most of its major rivals in Asia Wednesday after Cyprus's parliament rejected the plan offered by the European to tax bank deposits in the tiny island nation.

In Asian trading Wednesday, EUR/USD is lower by 0.09% at 1.2871. The euro continues to hover near four-month lows against the dollar on the Cyprus headlines.

Late Tuesday, Cypriot policymakers rejected the highly unpopular plan that would tax bank deposits in the country of less than EUR100,000 at a rate of 6.75% and deposits north of that amount at a rate of 9.9%. The vote casts doubt on the ability of the country to secure bailout funding and has prompted fears Cyprus could go bankrupt and be forced out of the euro zone.

While Cyprus has rejected one plan, some market participants expect another plan will be forthcoming as European policymakers do not want to tempt fate and risk the departure of any of the euro zone member states.

GBP/USD is higher by 0.04% at 1.5105 after data released Tuesday revealed that the U.K.'s year-on-year consumer price index jumped to a nine-month high of 2.8% in February, in line with expectations, while the monthly CPI rose 0.7%, also in line with expectations.

USD/JPY is 0.26% at 94.94 as traders are seen turning to the yen as another safe-haven play in addition to the greenback.

Elsewhere, USD/CHF is up 0.07% at 0.9475 while USD/CAD is higher by 0.01% at 1.0270 despite modest increases in oil prices in Asian trading.

NZD/USD is down 0.16% at 0.8235 after tics New Zealand said that New Zealand's current account balance fell to a seasonally adjusted NZD-3.26 billion in the fourth quarter from NZD-4.42 billion in the third quarter. Analysts expected a fourth-quarter reading of NZD-3 billion.

AUD/USD lost 0.04% to 1.0367 while the U.S. Dollar Index rose 0.05% to 83.14.

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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.

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