Traders consider the sharp drop in the euro to a 20-month low against the dollar, as a signal of a potential reduction to parity, explaining that the resignation of Italian Prime Minister may create another problem for Europe.
The probability of weakening the euro to $ 1 for the next nine months, more than 50%. On Friday, the figure was 45%, and only a month ago - 15%. Nine out of 53 forecasters surveyed by Bloomberg, said that the single currency will reach the level of $ 1 or less to the end of 2017. According to analysts of Deutsche Bank AG, during which time the currency will reach 95 cents, while Societe Generale SA and National Australia Bank Ltd. They say it could happen in April.
Matteo Renzi - the latest victim of a political wave of populist radical changes in developed countries after the «Brexit» and the election of Donald Trump as the 45th US president. Referendum in Italy on the constitutional reform that took place this Sunday, has become a de facto declaration of no confidence to the current government. But that is not all. In 2017, elections in key countries such as France, Germany and the Netherlands.
"Parity can be attributed to traders reacting to the events taking place today and the upcoming elections in France next year. However, it should also be considered in the context of the expected strengthening of the US dollar, - said the chief currency strategist at National Australia Bank in Sydney Ray Attrill. - The key issue for Italy right now is how quickly formed a technocratic government. If it goes more than a week to the fore again will the crisis in the banking sector, and this could put additional downward pressure on the euro. " After the announcement of the referendum results value of the euro fell by 1.5% to $ 1.0506, approaching the lows reached in March 2015 at $ 1.0458. This is the minimum level since January 2003. On Monday, the single currency has dropped in price by 1.2% to $ 1.054. According to the chief market economist at Mizuho Bank Ltd. Daisuke Karakama, the euro may fall to $ 1.02 in the first three months of next year, but the drop to parity is hardly possible, given the fact that this has not happened even at the height of the European debt crisis. "If the election results in France and Germany will increase the risk of exit from the EU countries, the euro may collapse.But to talk about whether the currency will reach parity, too early, "- he said.
Based on materials WELTRADE
