Want to see how over the top the GBP crash is?

[Mercury]

According to Deutsche Bank analysts Sterling is the 142nd weakest currency on a year to date basis with only Angola, Sierra Leone, Nigeria, Venezuela, Mozambique and Suriname worse.

 

Over done much!?!?!?!  This is where the markets are just barking mad!  Unless every other currency bar the USD is about to follow the GBP down of course...

 

BTW, for those of you arguing about 1.18 vs 1.12 on IG the DB analysts reported that the official low on the GBPUSD flash crash was 1.1841 but that one electronic platform had a print of 1.1378.  Looks like the wider market suffered the same issues.  Algos should be banned!

 

 

[donaldprice]

Just remember Mercury that old saying that markets can stay irrational longer than you can stay solvent. Right now everyone is expecting the UK to crash and burn due to Brexit, well at least that is what the remainers believe, market participants of course, just want to make money which is more than fare, too often i hear individuals try and set a reasonable level in FX markets, but they almost treat FX as if it is a non-floating currency, this has not happened since the ERM. Just look at the Mexican peso and how weak that one is, that is of the scale and Trump allegedly is the major cause. Shorting sterling is the best opportunity right up until Brexit negotiations show positive signs and the City is satisfied and maintains market access, which with the lobbying power of the household name banks they should at least have their voice heard, if nothing else.  

With regards to algos, as stated before i have no issues with fast automated trading as this does help with liquidity, but they seriously need to be controlled and possibly some light touch regulation as all market participants deserve to have the right to trade without sudden, unexplained  and unjustified hostile movements, especially when it spoils my EWT count, which is most frustrating, lol. 

Many also ask is Theresa May losing her marbles or simply does not care of the market volatility in GBP pairs. I some times wonder if she is purposely suggesting a hard brexit, in order to cause outrage and look for an excuse to call an election and get a mandate from the British people, she must have an excuse as the Tories could very easily gain an even greater majority and then she can have more autonomy and freewill to reign the laws and the policies she wishes to carry out. Lets face it, are banks seriously going to leave the UK and go to europe where they will potentially be subject to more regulation and neg rates from the ECB. The UK and the US are the only ones who can potentially raise rates within the next few years, Europe with all its troubles and endless debt cycles and banking fragility, the city will exhaust every last option, even to their detriment before contemplating European offices on the continent. 

[Mercury]

Yeah that was kinda my larger point , not that GBP would or should go up but that the current bearishness is irrational and once the market frenzy is over, probably owing to a realization that other currencies are worse and relatively overvalued vs GBP.  When that happens the likes of the Euro will fall and GBP will stabalise earlier and recover.

[Maverick73]

I'm guessing most BreExit is based on sentiment, half glass full / half glass empty. I would say banks would maintain a shrunken presence, and look for ways to bridge between the major market players. As for the economy, in the short term, a shrinkage may occur, and inflation overshoot will cause a dip in sterling until the traditional approach to combat the cost of living has been applied. Also variable factors such what the Fed say they intend to do and what they actually do when a maverick is behind the wheel. The BOE will mimic the Fed and move in tandem.