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Forex - Euro trims gains vs. dollar

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Investing.com - The euro pulled back from session highs against the dollar on Monday as initial relief which greeted news of a bailout deal for Cyprus faded, dampening demand for the single currency.

EUR/USD pulled back from 1.3048, the pair's highest since March 15, to hit 1.3002 during European morning trade, still up 0.09% for the day.

The pair was likely to find support at 1.2960, the session low and resistance at 1.3106, the high of March 15.

The euro rose to as more than one-week high against the dollar earlier after euro zone finance ministers rubber stamped a EUR10 billion international bailout for Cyprus that will see the closure of the country's second largest lender Laiki Bank and inflict heavy losses deposits of more than EUR100,000.

The country's largest bank, Bank of Cyprus is to be restructured, with depositors there also taking a large haircut.

But the euro remained under pressure as investors remained wary amid concerns that the bailout deal could set a precedent for possible future bailouts in larger euro zone states with troubled financial sectors.

Meanwhile, concerns over the economic outlook for the euro zone and political uncertainty in Italy also continued to weigh.

The euro trimmed gains against the pound and the yen, with EUR/GBP up 0.21% to 0.8547, down from a session high of 0.8561 and EUR/JPY was up 0.35% to 123.18 after touching session highs of 123.86.

Investors were looking ahead to a speech by Federal Reserve Chairman Ben Bernanke later in the trading day.

Last week, the U.S. central bank announced that it will leave monetary policy unchanged in spite of recent signs that the U.S. economic recovery is deepening.

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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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