Following the expected political turmoil in Italy, the pair EUR/USD recorded a serious decline to 1.05149, reaching a 20-month low. Earlier it became clear that the referendum raised by the Prime Minister Matteo Renzi had collapsed and he will resign on Monday. Renzi told that the result of the referendum is clear and he accepts full responsibility for the defeat. The Italians voted 60% to 40% against changes in the constitution. The turnout was surprisingly high, as some sociologists indicate that over 70% of citizens voted.
The news of the resigning of Renzi stirred opposition parties in the country. From “Forza Italia” want Democrats to draw up a new government without Renzi, from the Northern League and “Five Stars” want early elections.
The analysts might see even lower levels in EUR/USD, after data on Friday for non-agricultural employment in the United States recorded a significant increase by 178,000 and the unemployment rate unexpectedly dropped to 4.6%. Thus the measure reached a 9-year low, while expectations are Fed to increase the interest rates in December rose to 93%. The next milestone, which could weigh on the pair this week’s meeting of the European Central Bank. It is expected the bank to say it would start buying Italian bonds to support the economy.
On commodity markets, the oil continued to appreciate at the end of last week was strongly influenced by OPEC’s decision to cut its production by 1.2 million barrels per day. The light WTI crude oil rose by 1.21% to 51.61 USD per barrel, still is expected to test the level of 52 USD per barrel, a level that was passed in June and October this year. In the next 10 days is expected in December and Russia is incorporated into the Agreement OPEC by signing a memorandum of reducing production by 300,000 barrels per day. The Russian oil company Lukoil released a letter that said they support further action on reduction in yield.
At the end of last week, European stock indexes closed in divergent directions in anticipation of the referendum in Italy. German DAX 30 recorded growth to 10,520 points, while the French SAS 40 dropped to 4,526.50 points. The overseas indexes also did not find a single direction, Dow Jones Industrial dropped to 19,171.45 points, while the broader S&P 500 rose to 2,192.28 points.