Euro slides after Italy exit polls

December 4, 2016 10:41 pm Published by

Euro slides after Italy exit polls

  • 4 December 2016
  • From the section Business

Euro notesImage copyright
Getty Images

The euro fell against the dollar after exit polls indicated that Italian Prime Minister Matteo Renzi suffered a heavy defeat in Sunday’s referendum.

In trading late on Sunday, the euro was down 1.2% from Friday’s close, at $1.0547.

The single currency had already registered sharp losses since early November when it was trading at $1.12.

The referendum was formally over plans to streamline parliament, but for many was a chance to register discontent.

Mr Renzi has said he will resign if he loses the vote.

The Italian economy is already in a fragile state and a period of political uncertainty would be likely to do further damage.

In particular, Italy’s banking industry is seen as vulnerable to a loss of confidence.

Many banks are struggling with a burden of bad debt and are in need of refinancing.

That finance would be harder to come by amid a political crisis.

The size of Italy’s government debt is also a concern. Government borrowing, depending on which figures you look at, is one of the largest in the eurozone.

Categorised in:

This post was written by FSB News