NEW YORK, March 18 (Xinhua) -- The U.S. dollar strengthened against most major currencies on Monday, rising against the euro sharply as Cyprus' plan to levy tax on bank deposits cast shadow on European economic outlook.
Eurozone finance ministers agreed on a 10-billion-euro (13 billion U.S. dollars) bailout package for Cyprus in the early hours of Saturday, but the group also demanded the country impose a one-off tax on depositors to raise 5.8 billion euros (7.5 billion dollars) as a bail-in program.
The tax rate for deposits of more than 100,000 euros is 9.9 percent and the rate for deposits less than the amount is 6.75 percent.
An emergency debate in Cypriot parliament originally set for Sunday was postponed for Monday and then again for Tuesday night. Banks will remain closed until Thursday to avoid a run on deposits in the absence of necessary legislation.
The euro slumped against its major counterparts as chaos in Cyprus ignited fears over the debt crisis in the 17-country bloc.
Moreover, the Federal Open Market Committee will discuss its bond-purchasing program during the policy meeting from Tuesday and analysts believe it's likely to continue the current quantitative easing program to bolster economic growth.
In late New York trading, the euro plunged to 1.2947 dollars from 1.3074 dollars of the previous session and the British pound climbed to 1.5099 from 1.5077 dollars. The Australian dollar dropped to 1.0394 dollars from 1.0406.
The dollar bought 95.44 Japanese yen, slightly lower than 95.45 in the previous session. It edged up to 0.9454 Swiss francs from 0. 9403 and went up to 1.0216 Canadian dollars from 1.0195.