Friday, June 24, 2016

Pound tumbles to more than 30-year low as U.K. heads toward Brexit

Sterling stomped lower after jumping to 2016 high

Markets Reporter
Workers carry ballots after polling stations closed in the referendum on the European Union in Glasgow, Scotland.

The British pound was shoved to its lowest since 1985 against the dollar Friday, thrown on a major roller-coaster ride as it appeared the U.K. was headed toward breaking up with the European Union.
Sterling GBPUSD, -7.5366%  was trading at $1.3466, a 9.5% slide from $1.4871 late Thursday in New York as Brexit referendum results from counting areas across the U.K. rolled in.
Broadcasters BBC and ITV in the early hours of Friday morning forecast that the “leave” campaign won the referendum, putting the U.K. on track to sever its ties with the bloc it’s been a member of since 1973.
Late Thursday, the pound soared to a fresh 2016 high of $1.5022 after the last opinion polls and first local results pointed to a victory for the “stay” campaign.
Pound slumps after Sunderland results.
However, the U.K. currency quickly gave up those gains after the result from Sunderland in north-east England overwhelmingly pointed in favor of a Brexit. 61.3% of voters in the area voted in favor of “leave,” better than expected by most U.K. commentators. A result above 60% was seen as a strong showing for the “out” side.
Read: 5 steps the European Union must take regardless of Brexit vote
“To put tonight’s volatility in perspective, sterling’s plunge on that Sunderland count was bigger than Black Wednesday’s 4.1% drop. Markets are incredibly nervous now and it’s definitely tin hats time. If ‘leave’ wins there will be carnage for cable,” said Joe Rundle, head of trading at ETX Capital, in a note.
Against the euro, the pound GBPUSD, -7.5366%  was slammed to €1.2305 from €1.3065 late Thursday in New York.
The euro EURUSD, -2.4156%  was fetching $1.1012, compared with $1.1354.
As investors sought safety, the dollar USDJPY, -3.18%  bought ¥101.12, down from ¥105.85. It earlier fell to about ¥100 for the first time since 2013.

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