Euro falls as crisis in Cyprus unfolds

(Source: Yahoo! Finance)

The euro has fallen from near $1.31 on Friday to just above $1.29 following news this weekend that Cypriot bank depositors are getting hit by a tax on savings accounts to fund a €10bn EU bailout. Our banking reporter Tim Wallace:

The UK government yesterday vowed to reimburse any losses incurred by the 3,000 British service personnel and civil servants that are based on the island, though it couldn’t quantify the cost. The Financial Services Authority said that UK customers with deposits at the UK operations of Laiki Bank and Bank of Cyprus – the two with a presence in Britain – would not be affected.

But around 50,000 Britons who have savings in Cypriot accounts may still be hit by the levy. The Foreign Office urged all UK travellers to Cyprus to take several forms of payment with them to ensure they weren’t left without money, including euros, sterling and credit cards.

As news of the bailout terms broke on Saturday, scared savers across the island lined up to empty cash machines and protesters gathered outside government buildings.

(Full article)