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Friday, October 7, 2016

Deutsche Bank "Shocked" At "Disorderly, Dramatic" Pound Flash Crash

What was supposed to be a day reserved solely for today's nonfarm payrolls report as the biggest news, has been upstaged by the overnight flash crash in pound sterling, which as reported previouslyinexplicably plunged 6% in a sharp move lower ahead of the Asian open, dropping the most since Brexit...

... with liquidity in pound literally evaporating during the two minutes of chaotic selling, pushing the bid-ask spread surging to more than 250 times their  median during the past year...
... and after an attempt to recover all losses has once again resumed its grind lower, dropping to Europen session lows just above 1.23. 
And if Deutsche Bank is right, it won't stop there. According to Deutsche Bank, the GBP move has been "shocking", and it will only get worse. The German bank's FX analyst George Saravelos writes in a note to clients that Deutsche Bank expects the pound to revisit lows seen during the Asia session and forecasts GBP/USD to trade at 1.15 by next year.

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