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Euro slides after Italy exit polls | Euro slides after Italy exit polls |
(35 minutes later) | |
The euro fell against the dollar after exit polls indicated that Italian Prime Minister Matteo Renzi suffered a heavy defeat in Sunday's referendum. | 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. | 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. | 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. | 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. | 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. | 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. | 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. |