07 October 2016 at 10:31 GMT
John J Hardy
Cable dropped from the 1.26 area to 1.1378 in the space of three minutes but what does this overnight surprise mean for GBP, asks Saxo Bank’s head of FX strategy John Hardy.
He says that a large order may have set the big drop in sterling in motion with resting stop-loss orders triggered in thin market conditions.
Few offsetting buy orders led to the dropout and although GBP has recovered somewhat, the pound is still lower on some crosses, says Hardy.
He also previews Friday’s US employment report and hopes the market also sees impressive hourly earnings figures to provide a base for a stronger dollar in the run-up to the US presidential election.