Investing.com / Via uk.investing.com
The pound has fallen more than 8 cents against the dollar as markets panic about the possible economic consequences of a UK vote to leave the EU.
The pound initially rose to $1.50 – its highest level so far this year – at 10pm, after early polling evidence appeared to show Remain would secure a narrow victory in the poll.
However, early referendum results showed better-than-expected results for Leave, shifting betting markets and expert predictions sharply in favour of Brexit. The pound initially fell to around $1.45 after Sunderland declared in favour of Leave by more than 20 points – much more than expected.
As more results came, the pound had fallen to less than $1.42 by 2:20am – its biggest drop in more than two decades. The sharp move in the UK's currency signals a tumultuous day ahead on the world's stock exchanges as traders react to a potential shock result from the UK's referendum.
The pound rallied slightly to $1.45 after better-than-expected results from London for Remain at 2:30am.
A drop in the pound makes imports to the UK more expensive for UK consumers and businesses, as well as making holiday money pricier. By contrast, it makes exports from the UK more attractive to foreign customers.
The UK and European Union's central banks both indicated ahead of the result they stood ready to take emergency action to provide liquidity to markets if necessary following a vote to leave.
Financial journalists on Twitter stressed the drama of the currency spike:
The UK stock exchanges open at 8am on Friday.
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