CURRENCY VIEW

Major Forex News
Euro Advances From Five-Week Low Versus Yen on IMF-Cyprus Deal
The euro strengthened from a five- week low versus the yen after the International Monetary Fund said it
would provide 1 billion euros ($1.28 billion) of aid to Cyprus, boosting demand for the region’s assets.
The 17-nation currency reversed an earlier decline versus the dollar on optimism the IMF deal will help
stabilize Cypriot banks and reduce public spending. Australia’s dollar advanced against all 16 of its major
counterparts after the nation posted a smaller-than-estimated trade deficit. The yen weakened amid
speculation the Bank of Japan (8301) will boost monetary stimulus when it ends a two-day meeting
tomorrow.

The euro gained 0.1 percent to 119.85 yen at 7:09 a.m. in New York after dropping to 119.15 yesterday, the lowest level since Feb. 26. The common currency was little changed at $1.2820 after weakening as much as 0.2 percent. The yen declined 0.1 percent to 93.51 per dollar.

IMF Managing Director Christine Lagarde announced the staff-level agreement with Cyprus today on the 10
billion-euro program agreed on March 25. The deal calls for Cyprus to restructure its two largest banks,
reduce budget deficits and adjust its wage and pension systems.

The euro has weakened 1.9 percent in the past month, the worst performer among the 10 developednation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar dropped 0.2 percent and
the yen was little changed.The ECB’s Governing Council meets tomorrow to decide on interest rates. Of 56 economists surveyed by Bloomberg News, 54 expect the central bank to keep its main refinancing rate at a record-low 0.75 percent, while two predict a cut.