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Wild swings for pound as EU vote results announced | |
(35 minutes later) | |
The pound has swung wildly as traders reacted to the latest results from the UK's referendum on EU membership. | |
Before the results started to come in the pound rose as high as $1.50, as traders bet on a Remain victory. | |
But after strong Leave votes in Sunderland and Newcastle it tumbled to $1.43 and then took another dive at around 02:00 BST to $1.41. | |
Traders say they haven't seen such dramatic moves since the financial crisis of 2008. | |
"These moves are concerning and bring back pretty painful memories of 2008," said Jeremy Cook, chief economist at World First. | "These moves are concerning and bring back pretty painful memories of 2008," said Jeremy Cook, chief economist at World First. |
"The pound didn't have this bad a day [against the dollar] in the global financial crisis and the moves by the bookies to price Leave as the favourite is killing the pound. News from Wales is the most concerning at the moment alongside the London turnout dynamics," he added. | "The pound didn't have this bad a day [against the dollar] in the global financial crisis and the moves by the bookies to price Leave as the favourite is killing the pound. News from Wales is the most concerning at the moment alongside the London turnout dynamics," he added. |
A short while ago the pound had recovered to $1.4442. | |
Around midnight sterling had risen to $1.50 after leading Leave campaigner Nigel Farage said it looked as though Remain had "edged" the vote. | |
EU Referendum Results | |
EU Referendum live page | |
Analysts warn that the moves have been amplified by thin trading. | |
"'Volumes are very low and markets are relatively illiquid. Traders are very jittery, it's not just in sterling," said Jeremy Stretch from CIBC. | "'Volumes are very low and markets are relatively illiquid. Traders are very jittery, it's not just in sterling," said Jeremy Stretch from CIBC. |
Last week the pound fell as low as $1.40 as traders tracked polls suggesting a flagging Remain campaign. | Last week the pound fell as low as $1.40 as traders tracked polls suggesting a flagging Remain campaign. |
Farage: We'll win whatever happens | Farage: We'll win whatever happens |
In pictures: UK votes in referendum | In pictures: UK votes in referendum |
Key moments in the referendum campaign | Key moments in the referendum campaign |
EU Referendum: Decision time | EU Referendum: Decision time |
Top four pound moves post World War II | |
Source Bank of New York Mellon | |
Shares higher | Shares higher |
Earlier the FTSE 100 closed 1.2% higher to a two-month high of 6,338.1 points, with miners, banks and travel firms rising. | Earlier the FTSE 100 closed 1.2% higher to a two-month high of 6,338.1 points, with miners, banks and travel firms rising. |
Wall Street also jumped in late trading, with the Dow Jones and S&P 500 both closing 1.3% higher. | Wall Street also jumped in late trading, with the Dow Jones and S&P 500 both closing 1.3% higher. |
European markets earlier added to the optimism, with the Dax in Frankfurt and the Cac 40 in Paris rising 1.8% and 2% respectively. | European markets earlier added to the optimism, with the Dax in Frankfurt and the Cac 40 in Paris rising 1.8% and 2% respectively. |
Brent crude rose sharply in late trading to end the day 2.1%, or $1.03 higher at $50.91 a barrel, while US crude added 98 cents to $50.11. | Brent crude rose sharply in late trading to end the day 2.1%, or $1.03 higher at $50.91 a barrel, while US crude added 98 cents to $50.11. |
Higher oil prices bolstered shares in Shell, which closed up 3.1% in London, while BP was almost 1% higher. | Higher oil prices bolstered shares in Shell, which closed up 3.1% in London, while BP was almost 1% higher. |
Thursday winners | Thursday winners |
The biggest riser on the London market was British Airways owner IAG, whose shares rose 3.6% to 528p as traders expected aviation to be helped by a remain vote. | The biggest riser on the London market was British Airways owner IAG, whose shares rose 3.6% to 528p as traders expected aviation to be helped by a remain vote. |
London Stock Exchange Group ended 3% higher as its £21bn merger with Deutsche Borse looked more certain of going ahead. | London Stock Exchange Group ended 3% higher as its £21bn merger with Deutsche Borse looked more certain of going ahead. |
Saxo Bank's head of FX strategy, John Hardy, said: "Everybody is a bit shell-shocked at the way the market has moved so aggressively (toward the UK remaining in the EU). | Saxo Bank's head of FX strategy, John Hardy, said: "Everybody is a bit shell-shocked at the way the market has moved so aggressively (toward the UK remaining in the EU). |
"If you are stuck with a short position, you are being forced out without even knowing the result, but what this also means is that a Brexit result is now a catastrophic risk." | "If you are stuck with a short position, you are being forced out without even knowing the result, but what this also means is that a Brexit result is now a catastrophic risk." |