The interbank spreads across currency pairs that involve the British pound just after the polls closed at 10 PM BST (11 PM GMT) have ballooned to over half a cent or 50 pips. The Asia-Pacific markets are slowly opening their Dealing Desks and the British pound is rallying strongly. According to a comment from the leader of the eurosceptic UK Independence Party (UKIP) Nigel Farage.
An on-the-day poll by YouGov has revealed that the Remain camp has narrowly won the vote with 52 per cent of the population voting for the United Kingdom to remain in the European Union. Bookmaker Betfair is putting the remain odds at 93 per cent, which is consistent with the market trends we have seen in recent hours and are well aligned with the latest round of polls this morning which both have given the remain camp the lead.
Sky News is estimating the voter turnout to be at 87.3 per cent, which should in theory be consistent with a big win for the "remain" camp.
Right after the above-mentioned big news were released, the interbank spreads in the market have receded back to normal levels. The half a cent blip was strongly correlated with the slew of anticipated announcements just after the polls closed.
From the looks of it, the currency markets are at present functioning appropriately without substantial disruptions save for that massive blip in spreads, which is pretty normal for the type of news event that we are witnessing today. Overall, the FX trading systems appear to have performed in line with expectations for most market players and technology providers.
The GBP/USD pair has tested the 1.50 level, whilst the GBP/JPY has flirted with 160.00. Looking across the La Manche, the EUR/GBP pair is closing onto the 0.7610 level. The British pound has started its rally into the outcome of the referendum, rallying against major pairs into the New York close.
