* Euro losses accelerate after Dutch minister's comments
* Cyprus clinches last-ditch deal with international lenders
* Eurogroup says Cyprus measures are a specific case
* Economic concerns to weigh on euro
By Daniel Bases and Julie Haviv
NEW YORK, March 25 The euro fell against the
U.S. dollar and the Japanese yen on Monday as brief enthusiasm
brought on by Cyprus' last-ditch deal with its international
lenders swiftly segued into broader fears about the region's
Euro losses sharply accelerated after Dutch finance minister
Jeroen Dijsselbloem, who heads the Eurogroup, told Reuters and
the Financial Times that the rescue program agreed for Cyprus
represents a new template for resolving euro zone banking
problems and other countries may have to restructure their
Dijsselbloem appeared to backtrack from his comments later
on Monday, saying Cyprus was a specific case with exceptional
"Macro-economic adjustment programmes are tailor-made to the
situation of the country concerned and no models or templates
are used," according to a statement issued on the Council of
However, the damage to the euro was done by the earlier
remarks, market analysts said.
"The comments from Dijsselbloem about this being a template
for future bank restructurings spooked the market. It went from
Cyprus being a unique situation to a template, and that has
raised the contagion concerns," said Brian Daingerfield,
currency strategist at Royal Bank of Scotland in Stamford,
"Fear of a deposit tax could spark a capital move out of
peripheral Europe into German banks or the United States. That's
the real contagion risk from Cyprus," he said.
The euro slid more than 1 percent against the U.S. dollar to
a four-month low of $1.2829, and fell 2 percent against the yen
before retracing some of the lost ground.
In mid-afternoon New York trade the euro was last down 0.92
percent at $1.2870, far below a session high of $1.3048
set after the Cyprus deal was struck. The euro hit 120.08 yen
, before rising back to 120.96 yen, still a loss of
1.44 percent on the day. The euro rose to a high of 123.85 yen
during Asian trading hours.
"In the coming weeks the key thing to watch will be capital
outflows out of Italy and Spain," said Omer Esiner, chief market
analyst at Commonwealth Foreign Exchange in Washington D.C.
"That should severely complicate efforts by lawmakers and
the European Central Bank to get financial markets calm."
The euro initially rose after Cyprus agreed to shut down its
second-largest bank and inflict heavy losses on uninsured
depositors, including wealthy Russians, in return for a 10
billion euro ($13 billion) bailout.
Without a deal, Cyprus's banking system would have collapsed
and the country could have become the first to exit the euro
"This raises an important question: Why should a depositor
in any Eurozone country similarly vulnerable to a banking crisis
expect to be unscathed if a Cyprus-like calamity were to befall
them," said Ilya Spivak, currency strategist at DailyFX, in New
The euro's decline against the dollar broke through a key
technical support around $1.2880, the 50 percent retracement
point between the July 2012 low and the February 2013 high. The
Cyprus crisis has sent the euro below that point three times in
the last five trading days but it never closed below that point.
"A close below this level is important and could open up a
downside move toward the $1.2600 area," said RBS's Daingerfield.
EURO TO STRUGGLE
Worries about an economic slowdown in the euro zone,
political uncertainty in Italy, and prospects of the ECB easing
monetary policy in coming months to support growth were also
expected to weigh on the euro.
Uncertainty over forming an Italian government could hamper
any substantial gains in the euro.
By contrast, evidence of sustained economic growth in the
United States was pushing interest rate differentials in favor
of U.S. dollar assets.
Data showed speculators increased their bets against the
euro while bets in favour of the dollar rose in the latest week
to their largest since the week of July 17.
The U.S. dollar fell 0.58 percent at 93.95 yen,
according to Reuters data.
However, market expectations are the Bank of Japan will
unveil aggressive monetary stimulus at its next policy meeting
on April 3-4, the first under new BOJ Governor Haruhiko Kuroda,
are seen likely to support the dollar against the yen in the