Sterling has just gone nuts as early European traders put their feet under the desk and hit the buy button for GBPUSD. In the space of just a few minutes, the pound rallied close to 200 points before drifting back from the highs.
It’s currently sitting up 110 points, 0.76% at 1.4546.
The most likely catalyst is the release of polls earlier today which showed that the Brexit Remain vote is once again gaining the ascendancy in what is becoming an increasingly volatile series of poll results.
Yesterday GBPUSD was sold when news that the Leave vote was in front but the latest YouGov polls now show Remain has a narrow lead.
There’s also a theory that it was a “fat-finger” trade – in which case someone on a currency desk is having a very bad time right now – but the vast liquidity in the sterling market makes it hard to see how this could be driven by an error from a single trader.
Here’s the chart:
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