After months of calm in global markets, concerns about the future of the euro zone are back with a vengeance as fears grow that the turmoil in Cyprus could spread to other parts of the region and ultimately undo the single-currency block.
Those jitters saw investors dump government bonds in peripheral euro zone countries on Wednesday and push the euro to a four-month low of $1.2750. The currency was trading not too far from those levels in early Asia trade on Thursday.
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Banks in Cyprus are scheduled to reopen on Thursday and are being watched closely for a sharp withdrawal of cash by depositors that could spread to other euro zone countries.
"If you're not worried about Cyprus, then you're not thinking clearly because the contagion that people are talking about is a bank run elsewhere in the euro zone," Mike Crofton, president and CEO at the Philadelphia Trust Company told CNBC Asia's "Squawk Box."
"It will be interesting to see if there's a run on the banks in Cyprus and if there's contagion, I am fearful that the euro will collapse," he said.
On Monday, international lenders agreed to a 10 billion euro ($12.7 billion) bailout for Cyprus. In return for the funds, the tiny European island will shut one of its main banks and downsize another, with heavy losses for large depositors.