Sterling hit by flash crash

The pound fell sharply on the Asian markets today, at one point falling 6% to $1.1841, the biggest move since the Brexit decison, before recovering to $1.24. It is not known what caused such a quick sell-off but experts think it could have been caused by automated trading systems reacting to a report in the Financial Times.

The pound has been volatile since the UK voted to leave the EU and today’s sharp drop came after the FT published a story online about French President Francois Hollande demanding “tough Brexit negotiations”.

“It’s difficult to know exactly what triggered it,” Angus Nicholson, market analyst with IG in Melbourne, told the BBC.

Analysts speculate that a computer may have been set to scan the news for negative Brexit stories, with the order to sell if it found any. The trigger could have also been a simple mistake when a trader enters a wrong number.