A big showing for the ‘leave’ camp in Sunderland, which is a powerhouse for eurosceptics. It has just shaken out a lot of cable long positions across the board. The GBP/USD pair dropped over 500 pips with risk assets being sold off massively across the board. One can see moves like this only around periods of massive illiquidity on the markets.
I’m going to come out and say this is the biggest ever Sunderland related move in the JPY pic.twitter.com/nKbVSDYyGU
— Tom Orlik (@TomOrlik) June 23, 2016
Thin liquidity and ongoing uncertainty from the vote have triggered substantial repositioning with traders quickly heading for the exits only for some dip buyers to arrest the decline and ‘save’ the GBP market from a fallout. One thing appears to be certain – this is shaping up like a night that all industry players will remember.
Major tech providers and brokerages have shared with Finance Magnates that it is all business as usual as their systems are holding up rather well. Spreads across major currency pairs are all affected in a big way with GBP/USD ranging between 5 and 30 pips, while the difference between bid and ask rates on the EUR/USD pair is ranging between 5 and 15 pips at present. Japanese yen pairs are most heavily affected with the spread on the GBP/JPY at some providers reaching 80 pips.
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The swing move lower and the subsequent rebound which is still unfolding can be seen only on a night like this. The market has given the ‘leave’ camp a taste of their win by selling off all risk assets. The move has also affected the USD/JPY with the pair dropping 288 pips in less than a minute.
Ultimately, the most dramatic move has been observed in the GBP/JPY pair, which is typically the most volatile cross amongst major currency pairs. The rate dropped from just above 157.24 to 147.22, which is a total of 1000 pips move in 1 minute and 45 seconds.
Pound move at number 3 with a bullet…. pic.twitter.com/FOC9x2tKTw
— michael mackenzie (@michaellachlan) June 24, 2016
With a number of pro-Brexit regions reporting the current total tally is 52 per cent for ‘leave’ and 48 per cent for ‘exit’. This current result is not a significant indicator for the final outcome of the vote as political commentators have been warning that the first regions that will be reporting are likely to be looking at a Brexit.