RTTN:Euro Trims Asian Session Advance Against Majors
The euro erased its Asian session's advance on Monday in early deals as traders shifted their focus from Cyprus to broad euro zone slowdown.
Euro-zone's finance ministers reached a last-minute agreement with Cyprus on a 10 billion euro bailout deal, averting an imminent collapse of the country's financial sector.
The plan envisages splitting Laiki or Cyprus Popular Bank immediately into a good bank and bad bank, with the good bank to be folded into the Bank of Cyprus.
Holders of deposits above 100,000 euros in Laiki are forced to take losses, while the bank's deposits of less than 100,000 euros will be transferred to the Bank of Cyprus.
Bank of Cyprus will be recapitalized through a deposit or equity conversion of uninsured deposits with full contribution of equity shareholders and bond holders.
The conversion will be such that a capital ratio of 9 percent is secured by the end of the program. The bailout money of EUR 10 billion will not be used to recapitalize Laiki and Bank of Cyprus, the Eurogroup said in a statement.
The European Central Bank will provide liquidity to Bank of Cyprus, but the uninsured deposits will remain frozen until recapitalization has been effected.
All insured depositors and deposits up to EUR 100,000 in all banks will be protected in accordance with the relevant EU legislation.
Cyprus also committed to step up reform efforts in the areas of fiscal consolidation, structural reforms and privatization.
The euro reached 1.2215 support against the Swiss franc, down by more than 0.3 percent from Asian session's 6-day high of 1.2257.
The common currency also slipped to 122.87 against the yen and 1.2984 against the US dollar around 7:20 am ET from Asian session's fresh multi-day highs of 123.87 and 1.3049, respectively.
The euro that advanced to a 4-day high of 0.8563 against the pound around 6:00 am ET pared gains shortly thereafter. The currency cross was at 0.8535 just ahead of the North American session, down by more than 0.3 percent.
House prices in the U.K. advanced at the fastest pace in three years in March, driven by a notable improvement in the capital city on higher property demand, a survey by property researcher Hometrack showed.
House prices in England and Wales rose 0.3 percent in March from the prior month, the biggest increase since March 2010.
U.K. mortgage approvals for house purchases declined to 30,506 in February from 31,983 in January, the British Bankers' Association reported Monday. It was forecast to rise to 33,500.
Likewise, the number of other secured borrowing fell to 8,914 from 9,429 a month ago. Meanwhile, re-mortgages totaled 15,980, up from 15,184 in the prior month.
