The euro is under pressure in early Asian trade on Monday following the release of several exit polls showing “no” with a commanding lead in the Italian referendum on constitutional reform.
As at 9.15am in Sydney, the EUR/USD has fallen 0.93% to 1.0571, building on the losses seen earlier in the session.
While the exit polls have the reforms dead in the water, increasing the odds that Italian prime minister Matteo Renzi will step down, as IG Markets chief markets strategist Chris Weston notes, they’ve hardly had the best track record for predicting the final outcome of crucial political votes, both in Italy and in other major nations this year.
“I’ve seen five different exit polls and all modestly favouring the ‘no’ camp, with around 55% of votes,” he says.
“Exit polls are notoriously unreliable in Italy, plus they don’t take into consideration those who live abroad.”
Weston notes that along with reliability concerns, market liquidity is particularly thin, exacerbating market moves at present.
According to Italian government sources, Renzi will address the nation around midnight Italian time (2300 GMT).