Thursday, June 23, 2016
Wild swings for pound as EU vote results announced
The pound has swung wildly as traders reacted to the latest results from the UK's referendum on EU membership.
Before the results started to come in the pound rose as high as $1.50, as traders bet on a Remain victory.
But following strong Leave votes in Sunderland and Newcastle it tumbled to $1.43 and then took another dive after 03:00BST to below $1.37.
Currency traders say these moves are more extreme than those seen during the financial crisis of 2008.
"Never seen anything like it. These are once-in-a-lifetime moves, bigger than Lehmans and Black Wednesday, and we haven't even had the result yet," said Joe Rundle, head of trading at ETX Capital.
"It's looking more and more like a Leave win and these massive moves in sterling and stocks will only get bigger if that is the case," he added.
A short while ago the pound was trading at $1.3820, down almost 7% - a massive move in just four hours of trading.
Around midnight sterling had risen to $1.50 after leading Leave campaigner Nigel Farage said it looked as though Remain had "edged" the vote.
"'Volumes are very low and markets are relatively illiquid. Traders are very jittery, it's not just in sterling," said Jeremy Stretch from CIBC.
Last week the pound fell as low as $1.40 as traders tracked polls suggesting a flagging Remain campaign.
As for shares, the markets are pointing to a 6% slump when the FTSE 100 opens on Friday.
In Tokyo the
has fallen by more than 3%.
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