Cypriot bailout may rise

Since the recent Cypriot crisis and the overnight 2 cent jump in the Euro rate the GBP/EUR has remained fairly stagnant and not shown much volatile movement. This is perhaps largely due to the fact that despite apparent weakness in the Euro, the pound is far from strong at the moment with ongoing concerns for triple dip recession and further Quantitative Easing. And with a relatively quiet day today in terms of data this stagnation may continue.

Whilst the pound and single currency in recent weeks have been flagging and both fighting to avoid further economic woe the USD has certainly reaped the benefits, and against these has continued to make steady gains during 2013.

Earlier this week we saw the shock early release of the US fed Minutes which is now being investigated for anything untoward. News of a 3.77 trillion budget plan to reduce the deficit over the coming years and also that their Q.E programme will be held, with a hope to stopping it later this year further boosted confidence in the greenback and helped it make gains against the Euro and pound.

This no doubt helped by a small rise in European unemployment in the Eurozone, but generally the poor state of the Eurozone and UK means there is little to no resistance that can be offered at present against any positive economic news. Today much of the focus will be on Dublin as the Eurozone ministers meet to discuss the Cyprus bailout amidst fears from Cypriot creditors that the cost of the bailout has now risen from 17.5 billion Euros to 23 billion Euros. Interestingly some of the Capital restrictions that were in place have been temporarily lifted – restrictions on transactions have been lifted at least for the next 7 days in a bid to help small businesses who need to pay suppliers, and the limit for transactions requiring approval has been raised from 5,000 to 20,000. However the daily cash withdrawal limit is still300 Euros. Without doubt it will be a long and arduous road to Cypriot recovery and its crisis is only the latest and perhaps not the last in terms of Eurozone economic failure. With the US still doing at very least a great job in PR, demonstrating confidence and a plan towards economic recovery it would seem the Eurozone is far from out of the woods, with ongoing issues likely to be present for some time.

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