The euro fell to 20-month lows against the dollar after Italian voters on Sunday rejected constitutional changes backed by the government, prompting Prime Minister Matteo Renzi to announce his resignation.

The euro dropped as much as 1.4 per cent to $1.0505, falling below its 1 1/2-year low of $1.0518 touched late last month, and testing its key support levels where the currency has managed to rebound in the past couple of years, according to a Reuters report.

A break below its 2015 March low of $1.0457 would send the currency to its lowest level since early 2003, it added.

Resounding ‘no’ to reforms

With virtually all the votes counted early Monday, 59.6 per cent were “no,” according to Italy’s Interior Ministry, marking a stinging rebuke to Renzi’s plan to overhaul Italy’s legislature to make it easier to pass laws, including measures meant to make the country more competitive, said the Wall Street Journal.

“I take full responsibility for the defeat,” Renzi said in an address from the premier’s residence. The Italian people “have spoken in a clear and unequivocal way....We leave with no regrets,” he added.