The collapse of Sterling

The Bank of England are said to be investigating a dramatic collapse in Sterling at the open of Asian Markets this Friday morning.

GBP/AED traded to as low as 4.3878 for about four minutes and GBP/EUR to 1.0600 (and there is talk of the market actually trading lower).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

What are the reasons for this?

1. Harsh comments were made by the French President Hollande surrounding a hard Brexit

2. A rogue algorithm seems to have picked up this news and reacted severely. As the market moved lower, this triggered further algorithmic shorts on GBP

3. This all happened at a time when liquidity for the Pound was at its thinnest, compounding the effect.

What does this mean for your business?

The markets have since recovered somewhat but all of this suggests Sterling is under significant pressure.

If you haven't already, please contact your dealer today to find out how this could impact your business. 

For more information, please email info@delma-exchange.com