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Pound falls heavily as EU vote results come in | |
(35 minutes later) | |
There has been a dramatic fall in the value of the pound as traders react to the latest results from the UK's referendum on EU membership. | |
At one stage it hit $1.3477 - a low not seen since 1985. | |
Before the results started to come in the pound rose as high as $1.50, as traders bet on a Remain victory. | Before the results started to come in the pound rose as high as $1.50, as traders bet on a Remain victory. |
But following early strong Leave votes in north-east England it tumbled to $1.43 and then took another dive after 03:00 BST as Leave maintained its lead. | |
Currency traders say these moves are more extreme than those seen during the financial crisis of 2008. | |
"Never seen anything like it. These are once-in-a-lifetime moves, bigger than Lehmans and Black Wednesday, and we haven't even had the result yet," said Joe Rundle, head of trading at ETX Capital. | |
"It's looking more and more like a Leave win and these massive moves in sterling and stocks will only get bigger if that is the case," he added. | |
Around midnight sterling had risen to $1.50 after leading Leave campaigner Nigel Farage said it looked as though Remain had "edged" the vote. | 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 Results |
EU Referendum live page | EU Referendum live page |
"'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. |
As for shares, the markets are pointing to a 8% slump when the FTSE 100 opens on Friday. | |
In Tokyo the Nikkei 225 has fallen by more than 6%. | |
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 | Top four pound moves post World War II |
Source Bank of New York Mellon | 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." |