Volatility in pound forex pairs has been elevated since the Brexit vote. but just how big are the daily moves we are seeing compared to historic instances of price swings?

Over the last 52 weeks, the average daily range for GBPUSD has been in excess of 1%. But on a few occasions we’ve seen much large changes in the opening and closes prices.

Daily swings in excess of 3% have happened several times before, but are wild gyration in cable more common than before? Here we look at some of the biggest daily price moves.

GBPUSD_Jan31st_annotated

January 17th, 2017 – May’s Single Market Bombshell

Daily Range: 3%

Close: $1.24124

High: 1.24154, Low: 1.20179

Just days before Donald Trump’s inauguration and amid ongoing Brexit-inspired volatility, sterling enjoyed one of its best days in two decades, leaping by around 4 cents on the dollar. GBPUSD rallied more than 3% after prime minister Theresa May put an end to speculation by saying the UK would exit the single market.

October 7th, 2016 – Flash Crash

Daily Range: 7%

Close: $1.24323

High: 1.26216, Low: 1.17773

Thin liquidity in Asia sparked a massive sell-off in the pound at around seven minutes past midnight. Hedging positioning and automatic stop triggering left sterling reeling for a few minutes before something of a recovery set in. Circuit breakers on some exchanges were triggered and trading halted.

June 24th, 2016 – Brexit Armageddon for sterling

Daily Range: 12%

Close: $1.3676

High: 1.50066, Low: 1.32282

Amid dodgy polling data and the firm belief that Britain would vote to stay in the EU, the fallout from Brexit was made abundantly clear on June 24th as the pound collapsed to its lowest level in 30 years. This was the largest ever one day sell off in the pound.

October 24th, 2008 – Financial crisis meltdown

Daily Range: 6.5%

Close: $1.5897

At the height of the financial crisis the pound was taking a battering. GDP figures showed a sharp contraction in activity and Britain was heading for a recession. Although losses on the day were pared, the plunge was one of the largest on record and left the pound down 25% for the year. In fact 2008/09 was a volatile period for cable, with at least 5 of the widest daily ranges seen during this time.

September 16th, 1992 – Black Wednesday

Range: 4.7%

Close: $1.7850

The image of Norman Lamont speaking amid the gloom to confirm the pound had crashed out of the European Exchange Rate Mechanism was one of the defining moments of the John Major government. George Soros bet heavily against the pound and won.

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