UK Brexit Wiped $3 Trillion in 2 Days

June 27, 2016 Share Print 0

The U.K.’s vote to leave the European Union was a costly decision in more ways than one.

Between Friday and Monday, worldwide markets hemorrhaged more than $3 trillion in paper wealth, according to data from S&P Global, the worst ever recorded. For context, the amount shed by markets over the last two trading sessions far eclipses the turbulent trading losses of the 2008 financial crisis, according to S&P analyst Howard Silverblatt.

Approximately $1.3 trillion of that came from U.S. markets alone, Silverblatt noted. On Monday, the Dow Jones Industrial Average tumbled by more than 260 points, which fared better than the London Stock Exchange, where the FTSE 250 plunged by nearly 7 percent. The British pound has suffered worst of all, with the currency swooning, ending the session at a 31-year low.

Julian Jessop, an analyst at Capital Economics, said despite the increased volatility “it would be wrong to conclude that the world is on the cusp of another global financial crisis. Indeed, even sterling’s slump against the dollar is less dramatic when seen in its proper context,” he said, adding that the currency was fairly valued on a trade-weighted basis.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.