LONDON Nov 28 The cost of hedging against
swings in the euro's value over the coming week jumped on Monday
ahead of an Italian referendum that could prompt Prime Minisrter
Matteo Renzi to resign.
Options market pricing showed a jump in the cost of hedging
against volatility in the euro's exchange rate to the safe-haven
yen over the next seven days, covering the referendum on Sunday.
One-week euro/yen implied volatility rose to as much as
14.32 percent, its highest in more than two months.
One-week euro/dollar implied volatility also jumped by the
most in five months, hitting 12.175 percent, the
highest since the night of Donald Trump's victory in the U.S.
elections earlier this month.
Renzi has promised to step down if he does not win the vote
on constitutional reform, opening the way for renewed political
instability in the eurozone's third largest economy and
prompting fears of bank runs and credit rating downgrades.
(Reporting by Jemima Kelly; editing by Sujata Rao)