Well, the next spike is here.
While not totally a surprise like last year’s move by the Swiss National Bank to stop artificially holding down the value of the CHF leading to a 20% spike in the value of the Swiss Franc, Thursday’s somewhat unexpected win by the Leave side in the historic Brexit vote has led to mayhem in the financial markets.
In brief, investors are dumping everything (currencies, oil, equities) due to the uncertainty created by the Brexit win, heading to perceived safe haven investments – the USD, the JPY, Gold, Silver – and Bitcoin.
Some of the early stats as of 6am London time:
- GBPUSD – down 11% to 1.33
- EURUSD – down 4% to 1.09
- USDJPY – up 5% to 101
- Gold – up 6% to $1,335
- Silver – up 4% to $17.81
- Oil (WTI) – down 6% to $48.40
- Bitcoin – up 8% to $675
The key questions being asked now by those in the FX industry is: Who wasn’t prepared? Is there another Alpari UK or FXCM out there?
We will continue to bring LeapRate readers coverage throughout the day from inside the FX sector – who was really properly hedged and prepared, who wasn’t, and what happened on the trading floors when the Brexit victory became apparent.