The Italian public has rejected a referendum over Prime Minister Matteo Renzi's plan to reform the constitution, exit polls suggest.
Between 42 per cent and 46 per cent of voters backed reform, an exit poll on state broadcaster RAI has indicated, while 54 per cent to 58 per cent voted "no".
Other polls have given a similar lead of around 10 points.
Renzi has said he will resign if he loses the vote and is expected to make a statement at midnight, 11pm GMT, from his residence in Rome.
The euro dropped 0.6 per cent against the US dollar to $1.0585, edging closer to its 1 1/2-year low of $1.0518 touched late last month. Against the yen, the common currency fell more than 1.0 percent to 119.70 yen.
Political instability could undermine Italy's fragile banking system especially when Monte dei Paschi di Siena, the country's ailing third biggest lender, needs to raise €5bn by year end to avert the risk of being wound down.