Euro falls to 20-month low after Italy government's referendum defeat

The single currency could sink to US80c, according to analysts, as a vital rebooting of Italy's fragile banking sector is set be delayed again

The euro has fallen to a 20-month low against the dollar and investors fled riskier assets after Italian prime minister Matteo Renzi said he would resign on Monday following a crushing defeat on constitutional reform.

Renzi's defeat threatens to undermine efforts to stabilise the country's shaky banking system and deals a wider body blow to the European Union, which is already reeling under anti-establishment anger in the wake of June's Brexit vote.

Related: Italy referendum: Matteo Renzi to resign after defeat as Austria rejects far right - live

EU28: Euro reacts to exit polls in Italy's constitutional referendum. #referendumcostituzionale #ExitPolls #maratonamentana #Euro pic.twitter.com/TV3mGJVIdM

Im going to keep ReTweeting this post I made on July 5th after #Brexit until people get it. The EU is in a much worse position than UK #EURO https://t.co/xTU7eoRzTC

Related: Referendum result may lead nowhere for Italy's Five Star and Northern League

Nigel Farage: Hope the exit polls in #Italy are right. This vote looks to me to be more about the #Euro than constitutional change. pic.twitter.com/WBIUVsC5Hj