Sterling plunged on Friday, hitting a 31-year low in its biggest fall on record and UK stock futures pointing to a steep fall at the market open after Britons voted to leave the European Union.
A stunning slide in sterling at 3.40am London time saw the currency plummet below $1.40, and 20 minutes later it had breached $1.35 to levels last plumbed 31 years ago in the Thatcher-Reagan era. An hour later, the pound had found a new low at $1.3224.
Bonds also sold off sharply, pushing UK government borrowing costs sharply higher, as traders and investors grappled with the market implications of ‘Brexit’.
The pound had hit a 2016 high above $1.50 after an earlier opinion poll showed an outcome in favour of ‘Remain’, but fell nearly 17 cents from that peak as area counts came in and TV stations said the Brexit camp had won the landmark referendum.
The British currency’s fall of almost 10 percent was also historic, marking a decline greater than anything seen since free-floating system of exchange rates was introduced in the early 1970s.