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Forex - Pound slips lower vs. dollar in risk-off trade

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Investing.com - The pound slid lower against the dollar on Monday as demand for the safe-haven greenback remained supported after a controversial bailout deal for Cyprus rekindled fears over the debt crisis in the euro zone.

GBP/USD hit 1.5073 during European afternoon trade, the session low; the pair subsequently consolidated at 1.5105, dipping 0.04%.

Cable was likely to find support at 1.5014, the low of March 6 and resistance at 1.5175, Friday's high.

On Saturday, the European Union and International Monetary Fund reached an agreement on a EUR10 billion bailout for Cyprus. In return, the country's creditors demanded that bank customers must pay a one-time tax on deposits.

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 some support following reports that the government in Cyprus was preparing a new deposit tax proposal to lessen the impact on smaller depositors.

Elsewhere, sterling was sharply higher against the euro, with EUR/GBP dropping 1.12% to 0.8556.

Also Monday, official data showed that the euro zone trade surplus narrowed to EUR9 billion in January, compared to expectations for a deficit of EUR10.9 billion.

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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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