Cyprus bailout fears strengthen Asian currencies

<p>Asian currencies are being supported by Cyprus bailout fears.</p>

Fears over the ongoing talks over a Cyprus bailout are affecting the euro and leading to a strengthening of Asian currencies.

Cyprus rejected a controversial levy on bank deposits last night (March 19th) and there are now worries the two biggest banks in the country could be set to collapse.

The Japanese yen, Australian dollar and US dollar were among the currencies to gain ground against the euro as a result, BBC News reports.

Yen gained as much as 1.4 per cent and was trading at near 122.22 yen to a euro in Asian trade.

Mike Moran, senior currency strategist at Standard Chartered, explained there is concern over what could happen in Cyprus in the coming days.

"If policymakers initially thought it was OK to tax depositors as heavily as they first suggested, one just doesn't know what plan B or C might be," he said.

Joe Manimbo, senior market strategist at Western Union Business Solutions in Washington, recently told Reuters the impact of a Cyprus bailout could be huge for the euro.

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