Pound hit lowest level since Flash Crash

Since the ‘flash crash’ earlier in the month, we have seen the pound bounce up and down over time with the size of that bounce becoming smaller and smaller as time goes on and has consolidated over the past few days while the market decides on which way to go next. Yesterday we saw the end of that consolidation period and with just 15 minutes until the Bank of England’s Governor Mark Carney was due to appear before the House of Lords to give evidence regarding the banks response to the consequences of the EU referendum , we saw the Pound nose dive, removing all feeling that the currency was stabilising. Sterling-Euro and Sterling-Dollar ended the trading day almost half a cent lower from where it began.

Overnight AUD CPI data came in better than expected and today the focus is primarily on the US this afternoon with September’s Goods trade balance data due, Markit Services PMI for October, plus New Homes Sales figures.

For those who have an upcoming requirement, there is a fear that this newest break out will now dictate the longer term movement for the pound and we could well see the markets testing levels of 1.10 for gbp/eur and 1.20 gbp/usd in the coming months. So it may be worth considering securing your currency today, ahead of tomorrow’s GDP data release. We have already seen the Pound suffer and should a negative result occur we could very well see if drop again still. Please do get in touch with one of the Currency Index team if you have any questions regarding the rates and we can talk to through your options on how we can help you secure your currency.