Cyprus bailout deal leaves wise money markets unconvinced

The Cyprus crisis continues even though the bailout has been agreed.Cyprus bailout deal leaves wise money markets unconvincedIn a measure that was reached, they have come to a conclusion that all deposits of over € 100,000 will be hit by losses of over 40 percent as those under the mark will remain safe.

This has spooked markets moving them into negative territory throughout the region with almost every European Index plunging, as Cyprus heads into its 12th straight day of bank holidays, amidst concerns that most people will try and move out their funds in large numbers and would prefer to hold cash.

The negative sentiment is also enhanced by rumours that this format will be adopted as a template for any further bailout schemes.

Although top officials deny any such move in the future, markets are still wary that this format will leave the banks with fewer deposits and in turn will allow them to lend less, shrinking growth.

The euro as a currency has taken a hit and trades this morning at a rate of 1.2825 against the Greenback.

Meanwhile, there are also reports from Spain, that economic climate in the country will further deteriorate this year and shrink by 1.5 per cent.

Over to the US, where there was a glimmer of good news for US equities after figures showed orders for US durable goods rose by 5.7% in February whilst housing data also demonstrated a steady rise in prices.

Markets are fairly positive that the world’s largest economy is finally starting to experience some steady growth following years of stagnation.

As per February’s slump in consumer confidence, most people are still concerned on the Budget talks that continue in Washington.

However, the US dollar has managed to maintain strength as investors look to it as a safe haven with the on-going turmoil in the eurozone.

The positive US data releases, has done little to cheer up Sterling, as the currency was unable to cash in.

Retail sales in the UK for March were flat compared with a year ago as per the Confederation of British Industry, and the GBP/USD pair traded between a range of 1.5134 – 1.5206.

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