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STERLING SUFFERED A dizzying “flash crash” against the euro and dollar today in a computer-generated sell-off, sending Brexit shockwaves across markets.
The pound plunged more than 6% against the dollar in under ten minutes in Asian trading hours at the end of a tumultuous week of heavy losses.
The rough week for the pound comes after Prime Minister Theresa May signalled she would trigger Britain’s departure from the European Union by the end of March.
A spokesman for the Bank of England said that it was “looking into” the cause of the flash crash — a vertiginous drop in an asset’s value that can be triggered and exacerbated by automated trading systems.
Speaking Thursday, French President Francois Hollande said the EU should take a tough line with London during exit talks to prevent the break-up of the bloc.
“The value of sterling plummeted overnight as algorithmic trading programmes apparently triggered a crash,” said XTB analyst David Cheetham.
Comments from French President Hollande (surfaced) a minute before the selling began, so it seems far more plausible that news-scanning algorithmic trading systems began a move which gathered momentum.
Cheetham added that a combination of trades placed by algorithms and stop-loss orders can “exacerbate the move.”
The pound fell off a cliff at about 2310 GMT last night to strike a 31-year low at $1.1841, before rebounding back above $1.24.
The euro also hit a 6.5-year-high at 94.15 pence.
‘Fat-fingered trader?’
“A lot of investors are still scratching their heads as to how and why it happened, whether it was a fat fingered trader in Tokyo, an algorithm scanning for any negative Brexit news, or just a big seller of the pound,” said analyst Alex Edwards at trading firm UKForex.
“Whatever it was, it shows us that the pound is looking very vulnerable right now.”
Approaching midday in London, the pound rowed back to $1.2368, while the euro stood at 89.99 pence.
The crash was the second-largest intra-day decline in the pound, bettered only by its precipitous 11 %slump on 24 June 24, when the shock Brexit result emerged.
After rebounding, the pound again fell sharply this week on fears of a so-called “hard Brexit” that would see Britain depart the single market, or tariff-free zone, and end free movement of people into the country.
© – AFP 2016 with reporting from Rónán Duffy
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She got out easy enough but getting back into Trump’s America now might be a little tricker.
@winston smith: won’t be a problem, Trump likes grabbing pussys
@winston smith: President Trump has no problem with people entering USA in the proper legal manner and applying for a Visa.
@Steve Austin: is that why his travel bans have been so successful, bit like his businesses. Can you give me a Hell ya
@winston smith: I’ll take “what are feet for for 400 please”
@Steve Austin: is that why he signed an executive order preventing people who went through the proper channels from entering the US?
@Steve Austin: but people have a problem entering trumps America that’s why tourism is down bigly
I remember that Nat Geo Documentary about the cats and dogs that found their way home?
Homeward Bound I believe it was called.
@Brian Guilfoyle: he whisked it. simple.
There’s a voice that keeps on calling me……
@MARK O ‘LEARY:… until tomorrow I’ll just keep moving on
I hope she kept a catalogue of her travels..there is a film in it somewhere.
Cats, like all wool-bearing animals, instinctively travel North, where it’s warmer, and they won’t be so stuffy.
@Harry the Cat: I heard cats originate from a much warmer and dryer climate. North African/ Middle East type climate. They hate the cold and they hate water and the wet. They don’t have a woolly coat just a thin fur. They also get very confused when they see snow, some are scared, some go chasing after falling snow flakes. They’re not at home in the snow at all.
@Jack Bowden: ever heard of the snow leopard or the Siberian tiger?
@Harry the Cat: Canada is a lot colder than California. You got that in reverse mate.
@Robert Cullen: yeah I’m talking about the domesticated short hair cat.
@Harry the Cat: How is it warmer in the north you plum
@Shane, Harry lives in South Africa.
Well that’s about the same amount of time you’d spend waiting to see a gyno in Cork..and whole story about a cat but nothing about the mismanaged services maternity services in Cork.
Nothing about managers and consultants only working Monday to Friday ( because we all know, babies born over the weekend are a nuisance), nothing about their enormous salaries for this 9-5 job? nothing about overworked nurses trying to deal with the huge amount of babies to be born. Nope. Nothing.
@jenni: what the actual f?
@Damocles: Think it’s called reality on this small benighted island…..
@Kerry Blake: it’s a puff piece about a cat. Times and places.
That’s all well and good Jenni but it doesn’t explain how the cat got to Canada.
Ryan Air of course!
I’d hazard a guess she walked or possibly jumped into the back of a pick up truck for warmth
‘Adobted’ by another family that moved to Canada?
Somebody knows.
Ryan Air?
Probably walked
Cats are like that?
have your say