The British pound experienced something akin to a ‘flash crash’ on Friday as it dropped sharply to 30-year lows of $1.189 before rebounding slightly to $1.2399. The Cable had traded at $1.30 only last week, and the recent decline has left traders worldwide speculating that the Brexit is, and will continue to, have a larger impact than supporters expected. French President Francois Hollande has continued to support tough line negotiations on the U.K. as it prepares to exit the European Union. Hollande’s comments on Thursday echoed those of German Chancellor Angela Merkel during which Merkel firmly warned that the U.K. would not receive any special treatment following withdrawal from the EU. Many traders are expecting continued volatility in the currency markets, especially surrounding the pound, through the end of the year if not longer.
The euro eased 0.2 percent in Asian trading, hitting $1.1128, and is on target to show a 1 percent loss for this week. The dollar stayed firm during Thursday’s Asian session, with data showing that unemployment benefit requests fell last week, which hints to a strong nonfarm payroll report coming today. The yen fell against the dollar to 103.55, down from 101.00 last week.
Oil prices hit four month highs on Thursday, following reports of another upcoming informal meeting between oil producers. U.S. crude futures remained flat during Friday’s Asian session, while Brent was down 0.02 percent to $52.50 per barrel.