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The EUR continues to bounce all around this morning and now has moved back and forth between the 1.2930-60 level as the Cypriot Government has postponed the vote in Parliament on the bailout until Tuesday.

The vote was postponed so that there could be renegotiation on smaller depositors. It is hoped that these small deposits will not have to be taxed the 6.75% originally agreed upon. There has been talk of breaking the tax into 3-4 levels as opposed to the original two levels agreed upon.

There is concern that the precedent agreed upon here could affect the rest of the Eurozone if other countries request aid. Once a country states their need for aid, deposit flight from that country could very well happen.

Banks remain closed today in Cyprus for a government holiday.

DOW Futures are now down around 100 points indicating the US equity markets will follow the rest of the world lower based on this Cypriot news.

Further reading:  EUR/USD: Trading the German ZEW Economic Sentiment Index


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