Pound Plunges on U.K. Vote to Leave EU
24 June 2016 - 6:20PM
Dow Jones News
Britain's vote to leave the European Union battered the British
pound by more than 11% Thursday night and into Friday morning, sent
stocks in Europe and Asia tumbling and pointed to a day of steep
falls across the world's financial markets.
It was a brutal drubbing for investors who had stacked up bets
that the U.K. would choose to stay.
London's FTSE 100 and the Stoxx Europe 600 both plummeted over
8% in the early minutes of trading. Stocks in Ireland, a large
trading partner with the U.K., were down nearly 17%. Futures
markets pointed to the S&P 500 opening down as much as 5%, the
daily limit. Changes in futures don't necessarily reflect market
moves after the opening bell.
"Traders are choking on a fishbone this morning," Alex Dryden,
global market strategist at J.P. Morgan Asset Management.
The pound traded as low as $1.3230 in London's early hours, as a
pink-fringed dawn rose over the city and the British Broadcasting
Corp. called the referendum for Leave. That was the lowest level
against the dollar since 1985, and an epic move for a
developed-market currency just a day after reaching its highest
level of the year. The pound edged back up and was at $1.3640 by 8
a.m. London time, ahead of a speech by Prime Minister David
Cameron. Just hours before, it had peaked above $1.50.
Nothing was spared from the tumult. Brent, the international oil
price gauge, shed over 5% to $48.33 a barrel in early trade on
Friday. London copper prices dropped nearly 3% to $4,643.50 a
metric ton.
Bank stocks in Europe were down over 10%, while real estate
shares fell 13.4%.
Kosaku Narioka, Chao Deng, James Glynn contributed to this
article.
Write to Mike Bird at Mike.Bird@wsj.com, Georgi Kantchev at
georgi.kantchev@wsj.com and Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
June 24, 2016 04:05 ET (08:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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