Daily Range of British Pound Now Surpasses Black Wednesday 1992

The Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term vote tally continues shaking the foreign exchange market with hectic trading continuing in very illiquid markets. After an initial rally to just above 1.5015 the British pound has dropped against the U.S. dollar to a low of just above 1.3970. This daily swing represents a move of over 7.4 per cent and is the biggest ever on record.

To put this into perspective, back in 1992, when George Soros was dubbed as “the man who broke the Bank of England”, the total daily range was "merely" 6.52 per cent. At the time Soros led a speculative effort that identified potential weakness in the British pound’s currency basket peg in the European Exchange Mechanism, which resulted in one of the darkest days in London's foreign exchange market with the British pound collapsing in what became known as Black Wednesday.

The rollercoaster ride is likely to continue in the coming hours with the different regions continuing to report results. The daily range in the GBP/USD pair has surpassed 10 cents or 1000 pips, while the move on the GBP/JPY has surpassed 15 figures, or 1500 pips.

Equity markets futures are mirroring the move of the British pound with every drop lower sending futures lower in very thin and illiquid conditions. A tweet by the founder of Nanex LLC, a market data company, says about the market Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term conditions, especially in the futures markets: “620 eMini contracts bought at once cleared 3 handles (12 ticks). Twenty seconds later, 530 contracts cleared 3 more handles.”

Just a few minutes ago: 620 eMini contracts bought at once cleared 3 handles (12 ticks). 20 seconds later, 530 cleared 3 more handles

— Eric Scott Hunsader (@nanexllc) June 24, 2016

The British pound is currently trading in the middle of its 10 cents range against the U.S. dollar just below 1.45. Gold prices have also been on the move with a swing from just above $1250 reaching a high over $1285 and centering in the middle of the range.

The latest news from the polls is that Birmingham is apparently going to be too close to call. With the votes from the bigger cities expected in the coming hour, the final outcome of the referendum is still very uncertain.

In the meantime, traders and brokers should be aware of the possibility of central bank interventions with the Bank of Japan and the Swiss National Bank rumored to be ready to act decisively.

No one knows how this story ends. Just sit with the uncertainty & watch it all unfold. #Brexit #Bremain #UK #EU https://t.co/YqTBA9eGiv — Worth W. Wray (@WorthWray) June 24, 2016