The euro (EUR) dropped 150 pips against the US dollar (USD) opening at 1.2950 in the Asian session. The pair continues to slide moving below 1.2890 as European markets near opening time. The move comes after Friday night’s decision by European leaders, the IMF and the European Central Bank to tap into depositor’s money as part of the Cyprus bailout program. The troika of lenders has agreed to a figure of EUR 10 billion, to which the Cyprus government will add a further EUR 5.8 billion taken from Cyprus bank depositors. The original deal involved a cut of 6.75% on deposits less than EUR 100,000 and 9.99% on deposits above that amount. The deal is expected to be approved this afternoon in the Cyprus parliament. At the same time contagion fears about deposits safety spread in other periphery countries most notably, Spain and Italy.
- Gold (XAU) moved higher against the/background of a hit on depositors in a member of the Eurozone, as uncertaintyover the euro looms and banks in the Eurozone open.
- Weekly option volatilities for the EUR/USD jumped from 9.00 to 11.50 as markets edge towards fear and push options’premiums higher.
MOVERS, SHAKERS
EUR/CHF
The euro (EUR) opened lower against the Swiss franc (CHF) at 1.2180 from 1.2270 of Friday as markets incorporate the news from Cyprus. Many investors expect a shift of deposits away from the euro and into safe haven assets such as gold and the Swiss franc. 
