“Flash Crash” Decimates Sterling

Sterling lost a tenth of its value in minutes on Friday, in what traders said was a “flash crash” driven by computer-initiated sell orders that left the pound at a fresh 31-year-low and heading for its worst week since January 2009.

The pound has been under pressure for most of this week as anxiety grows that Britain will opt for a “hard” exit from the European Union. On Friday, it dived about 10 percent from levels around $1.2600 to $1.1378 in a matter of minutes in thin early Asian trade.

That low was later revised to $1.1491 — still the weakest level for sterling since 1985 — by Thomson Reuters, which owns the Reuters foreign exchange brokerage platform RTSL and said an outlying trade had been cancelled.


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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.