Sterling Hit by Second Flash Crash
After the flash crash seen in October when GBP/USD crashed from the 1.2600 area to lows below 1.2000 in a matter of minutes, there were echoes of this move on Thursday.
Sterling had gained strong support earlier in the day from the stronger than expected retail sales data. Sales volumes rose 2.3% for April compared with consensus forecasts for a sales increase of around 1.0% for the month. Sales were boosted by the late timing of Easter and favourable weather conditions.
Although there were still expectations of an underlying slowdown in retail sales, the stronger than expected data pushed GBP/USD above the 1.3000 for the first time in close to 8 months.
After fading to the 1.3000 area during US trading, GBP/USD spiked lower just after the European close. GBP/USD moved lower by over 100 basis points to lows below the 1.2900 level in less than 15 seconds.
The UK currency recovered quickly with no sustained impact with GBP/USD again testing the 1.3000 level on Friday as underlying confidence in the dollar remained weak.
Nevertheless, there will be further concerns surrounding the erratic market moves and lack of liquidity, especially as GBP/USD is an extremely important global pair which should not be subjected to such choppy trading conditions.
Read more about us, our authors and contact us on our About Us page
Information expressed in this article and on MoneyTransferComparison.com as a whole does not constitute as financial advice. If you decide to make any actions based on the information you read, we shall not be held responsible.