The shared currency of 17 European countries, Euro has strengthened after reaching a 4-month low value against USD as Cyprus sought alternatives to the plan of European Union. Incidentally, the plan was made to help Cyprus to avoid a banking collapse in future. The Federal Reserve, on the other hand, has maintained the stimulus measurements.
Federal Reserve has announced that it will continue with buying $85 billion of bond every month, so that the economy can be improved. European Central Bank has already pledged to provide liquidity to Cyprus and it gave this island country some time so that it can negotiate financial rescue. Apart from that, speculations are rife that Russia may also support Cyprus by giving it aid. On the other hand, the major currency of Japan, Yen, has decreased against most of its developed market counterparts, mainly because of the Nikkei report that stated that the soon to be Governor of Bank of Japan is expected to pledge bold monetary easing.
According to the Foreign-Exchange Strategist of BNP Paribas SA, Vassili Serebriakov, the investors are currently seeing a good amount of contagion from Cyprus to the rather big financial markets. He added that investors are hopeful that a solution will be found soon and hence, Euro is being supported.
On today, euro has increased by 0.6% and it is currently priced at $1.2954. On yesterday, it went down to $1.2844, its weakest value since 22nd November. Against Yen, Euro has advanced by 1.4% and is currently priced at 124.23 Yen. Incidentally, Yen has declined by 0.8% against USD and is currently priced at 95.93 per USD.
The Government spokesperson of Cyprus, Christos Stylianides stated that the Government is yet to come up with a deal with the Russian investors on the possibility of selling Cyprus Popular Bank Plc. According to a newspaper report on Kathimerini Cyprus, a primary deal was reached earlier.
Fabian Eliasson, who is the Vice President of the Corporate Foreign Exchange Sales department of Mizuho Financial Group Inc., said that investors are hoping that some sort of resolution on Cyprus issue will be reached. The Chief Executive Officer of the biggest asset manager in the world, BlackRock Inc., Laurence D. Fink stated that Europe will soon find a possible resolution to the Cyprus problem. He commented further that the Cyprus incident is by no way a major economic issue.