Investing.com - The U.S. dollar rose against most other major currencies on Monday after a applause over a Cypriot bailout quickly morphed into unease on fears that banking restructuring on the island nation could repeat itself elsewhere in Europe.
In U.S. trading on Monday, EUR/USD was down 0.97% at 1.2866.
Earlier Monday, eurozone policymakers and the International Monetary Fund approved a EUR10 billion rescue package for Cyprus, which sent the euro and equities up across the globe amid optimism the deal steers Nicosia away from a messy default and exit from the currency zone.
As part of the deal, however, Cyprus agreed to close up its second-largest lender, Laiki Bank.
The deal guaranteed that accounts holding EUR100,000 or less will continue to exist and remain insured, likely in another financial institution.
Larger depositors and bondholders in the bank, however, face haircuts, which sent the euro wiping out earlier gains and fueled safe-haven dollar demand, as fears began to build that depositors in other European countries may suffer similar fates when bailouts are sought.
Eurogroup head Jeroen Dijsselbloem said earlier that terms of the rescue package may serve as a template for other European bailouts.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.31% at 1.5183.
The dollar was down against the yen, with USD/JPY trading down 0.52% at 94.00, and up against the Swiss franc, with USD/CHF trading up 0.80% at 0.9480.
The dollar was mixed against its counterparts in Canada, Australia and New Zealand, with USD/CAD down 0.11% at 1.0217, AUD/USD up 0.10% at 1.0456 and NZD/USD trading down 0.02% at 0.8352.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.59% at 83.00.
Later Tuesday, the U.S. is to release a flurry of economic data with government reports on durable goods orders and new home sales as well as a report on consumer confidence.
In U.S. trading on Monday, EUR/USD was down 0.97% at 1.2866.
Earlier Monday, eurozone policymakers and the International Monetary Fund approved a EUR10 billion rescue package for Cyprus, which sent the euro and equities up across the globe amid optimism the deal steers Nicosia away from a messy default and exit from the currency zone.
As part of the deal, however, Cyprus agreed to close up its second-largest lender, Laiki Bank.
The deal guaranteed that accounts holding EUR100,000 or less will continue to exist and remain insured, likely in another financial institution.
Larger depositors and bondholders in the bank, however, face haircuts, which sent the euro wiping out earlier gains and fueled safe-haven dollar demand, as fears began to build that depositors in other European countries may suffer similar fates when bailouts are sought.
Eurogroup head Jeroen Dijsselbloem said earlier that terms of the rescue package may serve as a template for other European bailouts.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.31% at 1.5183.
The dollar was down against the yen, with USD/JPY trading down 0.52% at 94.00, and up against the Swiss franc, with USD/CHF trading up 0.80% at 0.9480.
The dollar was mixed against its counterparts in Canada, Australia and New Zealand, with USD/CAD down 0.11% at 1.0217, AUD/USD up 0.10% at 1.0456 and NZD/USD trading down 0.02% at 0.8352.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.59% at 83.00.
Later Tuesday, the U.S. is to release a flurry of economic data with government reports on durable goods orders and new home sales as well as a report on consumer confidence.