As the spotlight shifts from the UK leaving the EU to happenings in the Eurozone, all eyes turn to Italy to see how this will affect the EU, the Euro, and other global markets. The vote – a yes or no decision – is over the greatest constitutional change in Italy since the end of the monarchy in 1946.
David Johnson, Director at Halo Financial, comments, “US investors and global market commentators are talking about the potential for massive short positions in the Italian equities markets – we are likely to see considerable volatility over the coming weekend as the Italian constitutional referendum plays out.”
“A Yes vote would affect the powers of all areas of the legislature and, while some say it would rest too much power in the government, others say the new laws are poorly written and a Yes vote will kick off decades of legal challenge.”
“One possible outcome would be for Italy to move to exit the Euro and maybe even the EU. Hence the nervousness in Europe as we approach the weekend’s vote – and the significant potential to affect the strength of the Euro.
“This means a period of uncertainty and therefore potential volatility in the currency markets. For any individuals or businesses planning currency transfers now and in the coming weeks, risk management is key; automated orders are the tools that can help protect your money in the face of continued market uncertainty. Plan your currency transfers carefully to protect any significant UK-EU transactions in the days ahead.”