- Pound Gains The most in Three Months
The pound rose the most in more than three months as Prime Minister Theresa May acknowledged calls from Britain’s main corporate lobby group to avoid a “cliff-edge” exit from the European Union.
Much of the gains came in just one minute, and hours after May spoke — leading to speculation they were exacerbated by thin trading, and reminiscent of sterling’s Oct. 7 flash crash to a 31-year low of $1.1841. May signaled to the Confederation of British Industry’s annual conference in London that she may be open to a transitional trade deal with the EU, helping ease concerns that the U.K. is headed for a so-called hard Brexit.
The premier’s speech “definitely caught everyone’s attention,” said Viraj Patel, a London-based strategist at ING Groep NV. “It looks like it’s another example of the lack of liquidity in sterling markets, like the flash crash. Moves like this could be the norm going forward.”
The pound rose 1.3 percent to $1.2502 as of 3:50 p.m. London time, the most since Aug. 2, and climbed versus all 31 of its major peers. It’s down 16 percent since the June 23 vote to quit the world’s largest trade bloc.
