Flash Crash Pounds British Pound

The British pound suffered at the hands of a flash crash Friday, the likes of which have not been seen since the famous flash crash that occurred years ago and roiled U.S. equity markets.

As reported by CNN Money and numerous other sites, the crash began in Asia, and sent the currency down as much as six percent against the US dollar, with traders telling the site that automated trading and technology were to blame for the slide.

The pound had come into the session at a 31 year low, at about $1.26, and that had been in conjunction with what CNN said were “deepening concerns” over the financial impact of Brexit. In fact, the pound is down 16 percent since the June 2016 Brexit vote.

The flash crash brought the pound to $1.18 before recovering to $1.23. The speculation, said traders interviewed by CNN, centers around trading programs, or perhaps a large trade entered by a thus unknown investor (or several investors). One analyst, Jeffrey Halley, with online broker Oanda, said the plummet may have gotten its genesis from comments that have been attributed to French President Francois Hollande.

Hollande has advocated what CNN called “tough negotiations” over Brexit, in the wake of comments from UK government officials that the process of leaving the EU will begin early next year.

The negotiations may center on the so called “free movement” of EU citizens across the UK borders, or else the UK may suffer from limited access to free trade zones.