Posted on 12/04/2016 3:45:55 PM PST by aquila48
The euro slid in Asia on Monday after exit polls showed Italian Prime Minster Matteo Renzi clearly losing a constitutional referendum that could end his career and destabilize the country's shaky banking system.
The single currency dropped to $1.0577 in thin trade, after starting around $1.0645 earlier. The dollar was underpinned by expectations of a U.S. rate rise this month, and even held its ground on the safe-haven yen at 113.20.
Dealers said Italian bonds were set to come under pressure as top-rated U.S. Treasuries and German bunds gained. Asian investors are often reluctant to trade on European developments, preferring to wait for the continent's markets to open.
Investors and Europe's politicians fear victory for the opposition 'No' camp could cause political instability and renewed turmoil for Italy's banks, pushing the euro zone towards a fresh crisis.
Renzi will address the nation around midnight (6.00 p.m. ET).
Ultimately, the danger is that Italy holds a vote on whether to leave the euro, possibly triggering a break up of the entire bloc.
Analysts at RBCCM argued that, based on what happened in 2012 at the height of the Greek crisis, such a risk could see the euro trade as low as $0.8000.
"It may sound extreme, but if a second euro zone crisis were to hit, with the U.S. dollar at a much stronger starting point, EUR/USD could arguably trade lower still," they wrote.
Markets had earlier taken some encouragement when Austria's far-right presidential candidate was soundly defeated by a pro-European contender, confounding forecasts of a tight election.
The European Central Bank also meets Thursday amid much speculation it will announce a six month extension of its asset buying program and widen the type of bonds it can purchase.
(Excerpt) Read more at reuters.com ...
Hoping Italy gets somebody who keeps the invaders out.
Can anyone here provide a concise description of what was actually voted on?
Something a layman can understand?
The EU was something obam and the other extremists pointed at as a beacon for the US to emulate.
And all the Germans were driving Mercedes then, but a new Ford Mustang was @ $2500
Good riddance to the socialist and the EU.
When it started, the Euro was worth about 80 cents. Very, very quickly, it was worth about $1.40. That was ridiculous.
Good!
Viva Italia!!!!
Referendums to “play nice and make good” with EU expectations from Italy (from interest on their debt to the EU and other reforms).
A future election would have likely kicked him out, anyway, so he resigned.
One article I read suggested that the referendum would have increased Renzi’s power and comparatively decreased the power of Italy’s parliament. It would have made it easier for Renzi to make changes in Italy that favor the EU.
That was my understanding anyway.
It will be in a different form, surely.
“the rising dollar, which will limit exports.”
And favor imports.
Honestly, I think it implodes once a Eurozone country breaks away, but especially if it’s one of the 2 pillars of the EU.
It won’t just be below the dollar, the euro will be gone. Just a matter
of time.
“Yes” would have meant an almost total neutering of the Italian version of the Senate with a corresponding shift of that power to the executive.
when I came back to Italy, I prefer the dollar actually and that was 2 years ago. I could buy more with the dollar even with the Euro almost at par back then. Businesses in Naples wanted my dollars, believe me..
I remember 12 Euros for a beer in naples 2 years ago. Believe me, ALL of the cafes wanted my US dollars when they found out where I was from even when the Euro was at par. The Italians knew something back then..
something like this...
reduce the number in the Senate from 300 to 100.
Senate’s only power will be . approve or not,
(what actions are taken by the lower house)
reduce the authority of provinces,
I have no clue what that exactly means,
making the central gov more powerful
Thanks for the explanation.
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