LIMASSOL, Cyprus, Oct. 10, 2016 /PRNewswire/ -- The British pound collapsed overnight during Asian trading with a 6.1% drop against the US dollar sending the markets into shock. In what is being called a mysterious 'flash crash', analysts are not certain to what exactly led to the pound's sudden plummet. Recent comments from France's Hollande echoing Teresa May's 'Hard Exit' strategy combined with thin liquidity may have been the cause. A scenario that is being discussed is of a rogue algorithm placing trades or what is also termed a 'fat finger' error.
- GBP/EUR dropped almost to parity reaching a low of 1.1309
- GBP/USD reached a low of 1.19
- UK 100 (Footsie) climbed 28 points to 7028 early this morning
After a bigger move than what we saw during Brexit, the pound has regained some ground but is expected to stay under pressure throughout the trading day.
easyMarkets traders did well out of the event as the Company retained their fixed spreads where other brokers decided to widen theirs. All clients were able to exit their open trades and the company corrected all negative balances, keeping their promises to clients. In addition to that, our traders who were buying the pound, were stopped out at their requested stop loss, as a result of our unique in the industry no slippage policy.
Since the Brexit referendum the pound has fallen 13% against the dollar with more losses following May's announcement last Sunday on triggering Article 50 next March. Many analysts see more losses coming up for the pound.
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