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Forex - EUR/JPY falls as Cyprus bailout optimism fades

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Investing.com - The euro slid against the yen on Monday after investor applause over a Cypriot bailout morphed into unease over the country's agreement to restructure its banking sector.

In U.S. trading on Monday, EUR/JPY was down 1.33% at 121.12, up from a low of 120.10 and off a high of 123.86.

The pair sought to test support at 118.77, the low from Feb. 25, and resistance at 124.50, Wednesday's high.

Earlier Monday, eurozone finance ministers and the International Monetary Fund approved a EUR10 billion rescue package for Cyprus provided the country closes up its second-largest lender, Laiki Bank.

The bailout deal guaranteed that accounts holding EUR100,000 or less will continue to be insured and likely shifted to another financial institution, though larger depositors and bondholders in the bank face haircuts, which sent the euro wiping out earlier gains.

The euro weakened further, meanwhile, over fears that depositors in other European countries may suffer similar fates when bailouts are sought.

Eurogroup head Jeroen Dijsselbloem said earlier that terms of the rescue package may serve as a template for other European bailouts, which ruffled feathers on expectations that future financial lifelines may require banking-sector restructurings.

The euro, meanwhile, was down against the pound and down against the Canadian dollar, with EUR/GBP trading down 0.66% at 0.8474 and EUR/CAD trading down 1.11% at 1.3142.

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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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