The British pound is steady today after yesterday’s wild trading session as investors get ready to place their bets in the lead up to the Brexit vote.
Yesterday’s volatility was believed to be caused by a so called “fat finger” trade where a trader enters a trade incorrectly which can trigger automatic orders to buy or sell currencies.
It is not known who may have made the mistake.
The market is now expecting the British currency to jump or fall around 20 percent depending on the results of the Brexit vote and some brokers are already moving to limit risky trades so they don’t go out of business.
“Obviously, Brexit is going to be dominating things between now and the end of June,” said Dean Popplewell, vice president of currency analysis and research at Oanda.
Credit ratings agency Standard & Poor's has warned that the pound could lose its place as one of the world's major currencies should Britain vote to leave the EU.
The noted that foreign direct investment and other money invested into the UK would cease and London would lose it’s status as a major financial hub.
Risk warning: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, your level of experience and preparation of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.
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