The British pound sterling was just sent into oblivion once again as commentators are pointing towards some comments from French President Francois Hollande on ‘hard Brexit’. The bottom fell out from the market as sterling traders headed for the exits.
Commenting to Finance Magnates, the Managing Director of Think Liquidity Jeff Wilkins stated that the market has been forced lower by a liquidity bubble that caught markets off guard. From the looks of it British pound traders are stunned by the move as are some brokers.
The ‘flash crash’ has obliterated a number of traders, but some brokers could also be suffering as a result from the move. Finance Magnates is hearing about the lowest bid price ranging between 1.1644 for some market makers to 1.1915-90 for straight through processing (STP) brokers. At a later stage this estimate changed from below 1.1000 to above 1.2000.
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According to a report by Bloomberg, algorithmic traders are to blame for the sharp drop, exacerbating the effects from an article published by the Financial Times, where French President Francois Hollande commented on the commitment of UK authorities to a ‘hard Brexit’.
Market chatter doesn’t suggest dramatic implications, but some brokers are surely to be flooded with client enquiries since the discrepancies about the low point in sterling this morning.
The official print that Reuters reports is 1.1840. The CEO of Intermarket Strategy, Ashraf Laidi has dismissed a ‘fat finger’ trade in an interview with CNBC.