The GBP USD exchange rate was rocked last week by a mystery flash crash in the Asian markets in the early hours of Friday morning. The Pound (GBP) plunged by around ten cents against the US Dollar (USD) at one point but made a slight recovery to end the day’s session around two cents lower than before the crash.
‘Brexit’ and a Mystery Flash Crash Equals a Hellish Week for the Pound (GBP)
Friday’s flash crash capped off what had already been a poor week for Pound (GBP) exchange rates as market sentiment towards Sterling plummeted following the announcement from UK Prime Minister Theresa May that she would invoke Article 50 of the Lisbon Treaty before the end of March 2017.
This renewed focus on ‘Brexit’ set off already skittish investors as they fled the Pound amid fears that UK officials would pursue a ‘hard Brexit’ in which the UK government would relinquish access to the single market in exchange for greater controls over immigration.
French President François Hollande further added to investor’s ‘Brexit’ jitters as he took a hard stance towards the UK’s plan to leave the EU, saying that;
‘Britain decided to go for a Brexit, in fact I believe a hard Brexit. Well, we have to follow through with Britain’s wishes to leave the European Union and we have to be firm.’
By the end of the week’s session the Pound US Dollar (GBP USD) exchange rate had fallen by around five cents in its largest single weekly drop since the UK’s shock vote to leave the EU.
GBP USD Exchange Rate Volatile Following US Presidential Debate
The Pound to US Dollar (GBP USD) exchange rate remained volatile on Monday morning following Sunday night’s US presidential election debate, which saw Republican Candidate Donald Trump clash with Democratic rival Hilary Clinton.
Analysts are generally spilt over who won the debate, causing the markets remained dovish with the GBP USD exchange rate fluctuating by around half a cent earlier this morning.
Sterling will have few chances to recover this week thanks to a lack of influential UK data releases, so the Pound will most likely have to rely on some negative data from the US for any potential gains.
Current Exchange Rates
At the time of writing the GBP/USD exchange rate was trending around 1.24 and the USD/GBP exchange rate was trending around 0.80.
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