Tags: euro | renzi | referendum | defeat

Euro Touches 20-Month Low as Renzi Concedes Referendum Defeat

Euro Touches 20-Month Low as Renzi Concedes Referendum Defeat

 (AP)

Sunday, 04 December 2016 07:37 PM

The euro fell to the lowest level since March 2015 as Italian Prime Minister Matteo Renzi said he will resign after conceding defeat in the nation’s constitutional referendum.

The single currency slid against 15 of its 16 major peers as exit polls showed about 59 percent of Italians had voted against Renzi’s plans to rein in the power of the Italian Senate. Still, the euro pared losses following the premier’s speech, while the yen erased an earlier advance against the dollar.

“Markets tend to react much faster to changes of environment now,” said Yannick Naud, the head of fixed income at Banque Audi (Suisse) SA in Geneva. “There is now a possibility of the euro reaching parity to the dollar. Maybe not right away, but it is a possibility if there is certainty regarding new elections.”

The euro slid 0.8 percent to $1.0576 as of 1:16 a.m. Rome time. It earlier fell 1.5 percent to $1.0506, the lowest since March 16, 2015.

The result is the latest in a series of votes that have roiled financial markets in 2016, following Britain’s vote to leave the European Union in June and Donald Trump’s victory in last month’s U.S. presidential election. Still, with a “no” vote largely expected, the initial currency-market reaction is relatively muted compared to those events -- the pound fell by more than 10 percent as it became clear that the U.K. had voted for Brexit, while the dollar fluctuated wildly in the hours following Trump’s win.

While the referendum has raised concerns over Italy’s future in the euro-region, the nation’s political and legal system mean a “no” vote is unlikely to trigger a quick exit.

“If the referendum is rejected, this is not the end of the world,” Fabio Fois, a London-based economist at Barclays Plc, said before the vote. “Bicameralism will remain, but what really matters is the government attitude to press ahead with reforms.”

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The euro fell to the lowest level since March 2015 as Italian Prime Minister Matteo Renzi said he will resign after conceding defeat in the nation's constitutional referendum.The single currency slid against 15 of its 16 major peers as exit polls showed about 59 percent of...
euro, renzi, referendum, defeat
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2016-37-04
Sunday, 04 December 2016 07:37 PM
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