Renzi's resignation and the Euro
Once more the international political scene took a dramatic twist last week when Italian Prime Minister Matteo Renzi resigned from his position following a crushing feat in the country’s referendum. As Renzi stepped down on the 7th December, Gentiloni has taken the position with a fresh opportunity to gain confidence from the Senate and encourage strong economic growth for the country.
With the news of Renzi’s resignation hitting the markets last week, the Euro took a strong dive against the US dollar, dropping from 1.072USD to 1.054USD in just 2 days. This is the lowest the Euro has been since March 2015 where it fell to 1.052USD on the 13th. Even Trump’s surprise victory in the US election just 5 weeks ago only managed to drop the Euro to 1.072USD in 24 hours.
2016 has been the year which has truly shown that events in politics and current affairs have a strong impact on macroeconomics than previously thought. As large media stories hit the headlines, the markets are reflecting more the changes occurring on an international scale.