EUR/USD Swings Down Then Up After Italy’s Referendum

The main factor influencing EUR/USD today was the Italian constitutional referendum that has been held on Sunday. Initially, the currency pair reacted very negatively to the outcome of the voting as it ended with rejections of reforms proposed by Italian Prime Minister Matteo Renzi and his resignation. Yet EUR/USD bounced strongly after markets digested the news and decided that it is not the end of the world. As for today’s US economic data, it was decent but had a limited impact on the market, overshadowed by the news from Italy.
Markit services PMI registered a reading of 54.6 in November according to the final estimate. It was little changed from the preliminary value of 54.7 but a bit below the October’s 54.8 and the predicted figure of 54.9. (Event A on the chart.)
ISM services PMI climbed to 57.2% in November from the October reading of 54.8%, above the analysts’ median estimate of 55.3%. (Event B on the chart.)

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