The euro staged a quick recovery after dropping to 21-month lows at the start of this week’s session. EURUSD hit lows of 1.0504 on news that Italian PM Matteo Renzi announced he would step down as a result of the loss in the referendum for constitutional reform. Simply put Renzi’s resignation opens the door to elections early into next year, a shift in italian government and the possibilty of euro-skeptics gaining power and possibly ushering further instability within the EU.
The outcome seems to have already been discounted by the markets as the euro behaved in a sell the rumour buy the fact manner, as the “no” result had been widely anticipated. Euro hit highs of 1.0796 to the USD in yesterday’s session; so far despite a frail start this morning it seems it has held well against the USD with the currency pair at 1.0753 currently. Maybe after having digested the Trump presidency markets have got a bit of immunity against potentially problematic news?
The US Dollar continued to head lowwe yesterday with the US Dollar index closing a third consecutive day in the red.
Over night the RBA left rates unchanged at 1.5% as had been expected. Later today we have EZ GDP, and US Factory Orders & Durable Goods.
