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Bullet Report | GBP crashes 11%%, Markets in chaos after Brexit
June 24, 2016 8:47 amVideo
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One of the most historic events has unfolded overnight in the financial markets as the UK has voted to leave the EU, causing financial chaos in global markets including indices, stocks, currencies and commodities. Biggest victim has been the GBP which has fallen around 11% from 1.50 to 1.3250 in dramatic fashion. Focus will now turn on how Central Banks and Governments will deal with the uncertainty, something that will further spark volatility as already many Central banks are ready to pump more money into the system in order to bring back stability. Meanwhile, UK Prime minister has already announced his intention to resign in October.
Currencies: With over a 1400 pip more or 11% the GBPUSD has experienced its worst day since 1992 and brings the pair trading at its lowest in 32 years. Meanwhile, the EURO has also dropped from 1.14 to 1.10 amid these worries that the impact of Brexit would influence the EU economy as well as bring back the risk of other countries leaving as well. On the other hand, the USD, CHF and JPY have benefited. We look for the market to stay volatile and the above mentioned moves may extend further in the near term. The dollar index rose 3%. If sustained, that would be its biggest daily gain since 1978.
Stocks: Asian equities have fallen sharply with Nikkei down over 6% and DAX and FTSE opening today -10% but recovering slowly. This latest development is a blow to global confidence and could prevent the FED from raising interest rates as planned this year, and might provoke a new round of emergency policy easing from all the major central banks.
Oil and Gold: while Oil has not been a major market mover during this event, (it merely dropped $3), gold has benefited greatly by rising almost $100 from yesterday’s lows. Gold peaked to $1357 and trades now at $1312, indicating the huge impact on the volatility that the Brexit created.
We are proud to say, that our systems and processes have worked flawlessly. Before the Brexit, we announced that we would stick to our promise of offering the best trading conditions, and at a time that major competitors has changed spreads, leverage, and allowed traders to close positions only, but not open new ones, we not only allowed all the above, but also corrected any negative balances for our MT4 clients that occurred due to the massive gaps. The response has been overwhelming and we thank you for that.
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Source: Easy Forex Forex.Info
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