Fat Finger OR……….

7-oct-15-blog

Today’s big news was the British pound’s overnight “flash crash,” when it fell to its lowest intra-day level against the $US since 1985, 31-years ago.

During two chaotic minutes of Asian trading, the pound plunged by 6.1%, the most since the Brexit referendum in June, with traders speculating the crash might have been sparked by human error, a so-called “fat finger,” adding that computer-initiated sell orders exacerbated the slump:

7-oct-15-blog-1

There were conflicting comments around “brexit, ”  including from French President Francois Hollande who remarked late Thursday that the UK will have to “pay the price” for choosing “hard brexit,” whilst earlier this week the Bank of England Deputy Governor, Ben Broadbent, said the pound’s decline since brexit had been “relatively orderly.”

It’s a wake-up call” said a well known head of currency strategy at an international bank, but as can be seen from the following chart, taken from our new www.currencytimer.com service which highlights pink for sell the pound, neutral for uncertain/sideways and green for buy, the pound has been declining for well over two years now:

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British policy-makers will no doubt be in self-congratulatory mood this weekend, having scored the latest “victory” within the ongoing global competitive devaluations war, in a banal effort to grab a fleeting advantage of the shrinking global GDP and trade over which they have presided. Meanwhile, they are effectively “giving the finger” to their electorate who will suffer many added costs following the devaluations.

 

 

 

 

 

 

 

 

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2 responses to this post.

  1. […] mid-September “Fat Finger OR…” overview discussed the British pound’s overnight “flash crash,” when it plunged by 6.1% […]

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