Investors applaud Cyprus bailout

15.25 AEDT, Monday 25 March 2013

Investors applaud Cyprus bailout

By Tim Waterer (Senior Trader, CMC Markets)

The EU appears to have doused the flames over the Cyprus situation with investors across Asia today applauding the news that a bailout agreement has been reached. A bailout for Cyprus in some way, shape or form seems to have been the preferred outcome of financial markets with the major Asian bourses all exhibiting strong upward moves on the news from Europe. While news of a Cyprus bailout deal may have created a positive reaction from risk assets today, it remains to be seen if markets will stay continue to be this upbeat when the Cyprus banks eventually reopen for business.

The Australian market enjoyed a better performance today with the local index mirroring the move higher by other markets across the regions. The banking stocks picked up where they left off last week and this was a key driver of the ASX200 performance today as the index reacquainted itself with the 5000 level.

News from Cyprus and the EU reduced US Dollar appeal which sent the EURUSD back through the 1.30 level today with traders feeling more at ease with a situation which has dominated the headlines for the past week. The higher yielding Australian Dollar also benefitted from the move higher in risk assets in response to events in Cyprus, with the currency poised to perhaps make a run at 1.05 this week if traders remain upbeat that the situation in Cyprus is contained.

ends

© Scoop Media