The euro traded 0.2 percent from a four-month low as a Cyprus bailout plan to tax bank depositors cast doubt on the safety of financial assets in the region.
The 17-nation currency held its biggest decline in almost nine months ahead of debt auctions in Italy where lawmakers are still trying to form a government after inconclusive elections last month. The yen traded near a three-week high before Bank of Japan (8301) Governor Haruhiko Kuroda speaks to lawmakers today.
“The market was spooked by the possibility that Cyprus won’t be the only time bank deposit holders are forced to share the cost of a bailout,” said Yuki Sakasai, a foreign-exchange strategist at Barclays Plc in New York. “With the political risk in Italy continuing, it will be hard for the euro to make any headway.”
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