Monday, December 5, 2016

The euro is weakening against the dollar and the rate of borrowing on Italian climbs, following the resignation of Renzi – The World

The stock markets were Monday in Asia, against the backdrop of concerns for the third largest economy in the euro zone.

The euro has collapsed on the asian markets to the announcement of the victory of the no vote in the referendum on the constitutional reform in Italy.

The euro fell on Monday 5 December, the lowest since twenty months after the victory of the no in the referendum Italian, followed by the resignation of Matteo Renzi. The bonds of the Italian State to 10 years will see their rate climb significantly on Monday morning. The stock markets continued to decline in Asia on the backdrop of concerns for the third largest economy of the single currency.

The euro won and then stabilizes

The euro won when the polls to the exit polls were broadcast at the close of the poll, giving the non-winner to nearly 60 %. She touched 1,050 6 dollar around 8: 20 a.m. (Monday, 0 h 20, heure de Paris), compared to 1,066 4 Friday in New York. This is the lowest level since march 2015 : the euro was then dropped to 1,045 8 dollar.

The single currency has held firm however, after that, hovering around 1,057 0 dollar to 2 hours in Paris, a sign that traders don’t give in to the panic. At the same time, the yen, a safe haven, widened. The dollar slipped to 112,88 yen in the early hours of the morning in Tokyo, against 113,51 yen on Friday, before getting back up again to 113,70 yen.

asian markets decline

The Tokyo stock Exchange finished down Monday, and the yen, safe haven, strengthened on the backdrop of concerns for the third largest economy of the euro area. At the end of trade, the Nikkei of 225 blue chips yielded a 0.82 % (− 151,09 points), 18 274,99 points. He had already lost 0.47 per cent Friday in the wake of a closing level on record for this year.

The expanded index Topix of all the titles of the first table, for its part, declined from 0.75 % (− 11,02 points) 1 466,96 points. On the foreign exchange, the dollar fell to 113,43 yen, against 114,05 yen Friday at the closing of the place tokyo. The euro was also 119,89 yen, against 121,85 yen.

Elsewhere in the region, Sydney (− 0,71 %) and Seoul (− 0,17 %) moved also in the red.

the reactions of The european markets followed

The resignation of Mr. Renzi of the presidency of the Italian Council opened a period of uncertainty for the economy transalpine, which is still lagging behind in Europe. Especially, the banking sector of the country is still exhilarated by the financial crisis and riddled with bad debts. Fears of bankruptcy of the country’s banks resurfaced regularly. His defeat in the referendum of Sunday, had, however, been anticipated by observers.

In addition, the markets were able to be relieved by the failure of the austrian far right that has lost his bet to win the presidency of the Republic on the background of the surge in populism in Europe. Its candidate Norbert Hofer has suffered, according to the projections, a clear defeat in the face of the environmentalist Alexander Van der Bellen.

The rate of borrowing of Italian State on the rise

If the impact remained limited in Asia, the reaction of european financial centres, particularly the Italian bond market, it will be followed with attention.

Shortly after the opening of the secondary market on Monday – that is to say, on the market where exchange of debt already issued by the States – the borrowing rate to 10 years Italy was 2,027 per cent, before returning to 1,996%. It stood at 1,902 % Friday evening at the closing.

This is a sign that investors have relinquish these titles. They have rather a tendency to abandon the debts of countries considered more fragile, since, in addition to Italian debt, that of Spain also saw its rate to 10 years forward slightly to 1,579 %, compared to 1,543% Friday night.

The european central Bank (ECB), which takes into Thursday, its last monetary policy meeting of the year, could accelerate its asset purchases in case you need to calm the markets, according to analysts.

François Villeroy de Galhau, governor of the Bank of France, and as a member of the governing council of the ECB, said he was fully confident in the resilience of the euro and of the euro area. the ” The referendum yesterday in Italy can be considered as a new source of uncertainty, he said. in However, it can not be compared to the british referendum. The Italian people were called to the polls to vote on a constitutional question inner and not on the belonging of long-time Italy to the EU. “


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