It’s been a year of major political announcements, from the Brexit to the US Elections and now the Italian referendum. This weekend saw voters reject reforms proposed by Italian Prime Minister Matteo Renzi and has subsequently led to his resignation.
What does it mean for traders?
Many traders anticipated a "no" vote, as polls had largely pointed in that direction in the run-up to this weekend’s referendum. As the markets open at the start of another trading week, all eyes turn to Italy (the euro zone's third-largest economy) as the country starts considering its next move, which could potentially be an exit from the Eurozone.
In terms of currency movements EUR/USD experienced a 20-month low, however, this was not as low as many anticipated and the market quickly settled after the news was released. It’s worth mentioning that the pressure on the euro is expected to remain due to Thursday’s European Central Bank (ECB) meeting.
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