The over -6.00% plunge in the Pound during the Asian overnight session marked the biggest move since the UK’s “Brexit” referendum, driving Sterling to as low as $1.1840 to the lowest level seen in the GBPUSD pair since March of 1985. The ferocity of today’s decline is further evidence of the extreme volatility that is becoming commonplace in the global foreign exchange market as algorithmic traders keep increasing their transaction volumes. Some analysts reckon that French President Francois Hollande’s comments on Thursday, urging EU members to lead tough negotiations with the UK to avoid contagion, might have also helped bearish sentiment to peak. Going forward, the outlook is not bright for the currency as speculation of further rate cuts by the Bank of England gather momentum amid the backdrop of a possible December rate hike from the US Federal Reserve.
Pound in Freefall
Daily Analysis - 07/10/2016