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 ...
What was the all time high for the euro?
Thanks for the explanation.
Sounds as if Italy is moving in the right direction.
Or at least the Italian voters are.
1.87 in July of 1973. Happened to have the page open when you posted. ;-)
Mr. K, here’s a link to a great post answering our questions.
Yes they would. It’s a very bizarre cult.
And it usually starts with an economic malaise ....
I was not aware the euro went that far back.
My wife wants to go to Europe next year. And she usually gets what she wants. Which means I’ll have to break my promise to myself and fly again. All if God is willing.
Be careful what you wish for. The stronger the dollar becomes, the worse for our exports.
But the better for our imports...
Strong (and steady) is good, up to a point.
Yes, yes, yes, and yes to McCarthy.
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