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Pound plunges to lowest level in 30 years after Brexit vote

Published 24/06/2016

A one-year high was swiftly surpassed by a dive bigger than on Black Wednesday
A one-year high was swiftly surpassed by a dive bigger than on Black Wednesday

The pound crashed to its lowest level in 30 years on Friday as Britain headed for the European Union exit door.

Sterling plunged 10% against the dollar overnight to 1.33 US dollars, a low not seen since 1985, as the Leave campaign clinched victory. The fall, which settled at 9.2% in afternoon trading, represents one of the biggest daily falls on record for a major currency.

The pound clawed back some of the losses by the afternoon, hitting 1.36 US dollars.

Dominic Rossi at Fidelity International said: "We may have not seen the end of this. As the dust settles and the fundamentals assert themselves, it's likely that sterling will continue to weaken against the US dollar and the euro."

Sterling had hit 1.50 dollars shortly after polls closed at 10pm on Thursday, but as Leave votes flooded in in increasing numbers, the strength of the pound plummeted.

Joe Rundle, head of trading at ETX Capital, described the win for Leave as "one of the biggest market shocks of all time".

He said: "The pound has collapsed to its lowest level in over 30 years, suffering its biggest one-day fall in living memory. Panic may not be too strong a word - the pound could have further to go over the next couple of days as markets digest the news."

Kathleen Brooks, research director at City Index, added: "Financial markets seriously underestimated the possibility of a Brexit; the pound may have fallen in the lead up to the vote, but not to the lows that it has reached today."

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