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Cypriot Government Is Between a Rock and a Hard Place

The situation continues to develop as comments from EU officials and Cypriot politicians fuel market speculation. Sources for many rumours are unclear leading to speculation and confusion as to what the current situation is.

The banks remain closed in Cyprus and the final terms (not yet known) are still required to be ratified by a Cypriot government. The Cypriot coalition has only recently taken office and the required majority for a vote might not be met.

Market chatter has begun to circle of an exit of Cyprus from the single currency, pushing up Gold and weighing on EURUSD.

Key moments so far today…

Reports by Greek and Cypriot media that the parliamentary vote could be delayed further

There has been widespread criticism of the bank levy effecting individual accounts under €100,000

Cypriot banks are expected to remain closed until Thursday

JP Morgan says Cyprus is between a rock and a hard place and predicts its government will refuse to pass the deposit bailout package in current terms

There has been condemnation from Russian officials of the proposed “deposit theft”

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