By Sarah Turner and Sara Sjolin, MarketWatch
LONDON (MarketWatch) — The euro fell on Tuesday ahead of a parliamentary vote in Cyprus on the country’s bailout conditions, while the dollar index moved higher after U.S. housing data continued to improve.
The euro EURUSD -0.0103% was slightly lower at $1.2945, compared to $1.2954 in late trading Monday, when the shared currency tanked on the back on worries over an announced levy on bank deposits as part of a bailout plan for Cyprus.
Up next in the Cypriot bailout drama is a parliamentary vote on the bailout conditions, although the timing of that vote is uncertain. The vote is scheduled for Tuesday evening Cyprus time after being pushed back from Monday, but rumors say the approval could be postponed to later this week. Read: Cyprus deposit tax raises long-term political risk
Still, “sentiment does seem to have improved in the markets after yesterday’s bloodbath,” according to IG Markets chief market strategist Chris Weston. See: Why market shrugged off Cyprus crisis
The Cyprus woes further weighed on most European stock markets.
The dollar index DXY +0.02% , which measures the greenback against a basket of six other currencies, traded at 82.71, up from 82.639 in late North American trading on Monday and well above 82.277 recorded late Friday. Read: Euro slumps on Cyprus plan to tax bank deposits
The WSJ dollar index XX:BUXX +0.05% , which measures the greenback against a slightly wider currency basket, rose to 73.55 from 73.49 recorded Monday.
The dollar’s moves came as data for U.S. housing starts showed a 0.8% rise in February, with longer-term trends signaling a housing market that continues to strengthen. U.S. stock futures pointed to a higher open on Wall Street.
Investors also trained their attention on the ZEW Indicator of Economic Sentiment in Germany, showing a 0.3 point to increase to 48.5 points in March.
Against the Japanese yen USDJPY +0.1236% , the dollar reached 95.41 yen, up from ÂĄ95.21 in late North American trading Monday.
The British pound GBPUSD +0.0961% traded at $1.5128, rising from $1.5106. The Office for National Statistics said the Consumer Prices Index rose by 2.8% in February on an annual basis, up from 2.7% in January. The uptick comes after four consecutive months where the index stood at a 2.7% level.
The Australian dollar AUDUSD -0.2149% slipped to $0.9758, representing a 0.2% loss, according to FactSet data.
Minutes of the Reserve Bank of Australia’s last meeting — where the central bank kept its key rate on hold at 3% — were released Tuesday.
“The minutes are historical, and recent events in Cyprus provide a reminder of the still-compromised banking systems in parts of Europe and the fragile nature of confidence more generally,” said RBC Capital Markets strategist Su-Lin Ong.
Still, the minutes showed that the RBA’s message remains unchanged, she said.
“Firmly in wait-and-watch mode, it expects its policy actions to gain further traction,” she said.
Sarah Turner is MarketWatch's bureau chief in Sydney. Follow her on Twitter @SarahTurnerMKTW.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
