The first day of the final week of the first quarter of 2013 saw the common currency of the European Union lose value against the U.S. dollar as concerns spread about whether the proposed bailout for Cyprus will be strong enough, Bloomberg reports.
The monetary unit initially gained in value as the bailout was believed to be sufficient. Cyprus is set to follow Portugal, Ireland and Greece on two occasions as euro zone nations accepting bailout aid during the tumult of the sovereign debt crisis.
"We would expect the euro to be trading lower by the end of the New York day," states a Monday note penned by Group of 10 currency strategy head Steven Englander at Citigroup Inc. in New York, according to Bloomberg. "The reason is that the Cyprus crisis has opened up some precedents that will make investors more worried about how future euro zone crises will evolve and does nothing to enhance growth."
The European Central Bank last week issued an ultimatum to Cyprus, ordering the nation to accept a bailout by Monday. Cyprus President Nicos Anastasiades endorsed the bailout deal.
Chinese foreign minister Lou Jiwei said during a speech to an economic forum that Europe is likely to struggle with debt issues for the next decade, according to Reuters.
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