Chicken chow mein, pizzas and energy drinks were the favoured investments of currency traders last night as they pulled an all-nighter in case of another Black Wednesday.
"It'll be a late night, Chinese takeaway and sugary drinks to keep us awake," said Justin Doyle, a senior foreign exchange dealer at Investec Ireland.
“One or two of us are booked into rooms in nearby hotels so we can get back to our desks again early in the morning. The currency moves in the past week have been phenomenal. We’ve been very busy.”
Foreign exchange is the world’s biggest financial market, run on a 24-hour basis during weekdays, starting in Asia, followed by Europe and then North America.
Sterling soars
Sterling soared to its highest level since mid-December, within a whisker of $1.50 shortly after a YouGov poll suggested UK voters will remain within the EU. London-based online trading firm IG Group said shortly after the polls closed in the UK that it’s clients see a 91.5 per cent chance of the Remain side winning.
Sterling rose to as high as $1.4999 within minutes of the YouGov survey being announced, having traded at $1.4867 shortly before voting ended. In the run-up to the referendum, global stocks and currencies swung between gains and losses. Sterling’s volatility surged to the highest since 2008 when the lead in opinion polls fluctuated between the Leave and Remain campaigns.
George Soros, the world's most famous currency speculator, warned a UK vote to leave the EU would trigger a plunge in the sterling greater than Black Wednesday in 1992, an event that made him a fortune.
Still, European equity markets were buoyed yesterday by optimism that the Remain camp would win.
The Iseq index of Irish shares rose 1.3 per cent to 6,371, bringing its advance to 8 per cent over the past week, when the murder of pro-Europe UK MP Jo Cox prompted the Leave campaign to lose its lead in opinion polls.
European session
During the European session sterling broke through $1.49 for the first time since 2015, although it later fell back from its highs. It had fallen almost to $1.40 last week when polls showed a surge towards Leave.
The FTSE 100 index in London was up 1.2 per cent at its close, taking gains for the week to 5.3 per cent, its biggest weekly advance since December 2011.
"Brexit is the only show in town," said Eugene Kiernan, head of investment strategy at Appian Asset Management in Dublin.
“There was a flurry of enthusiasm during European trading as investors put their money on the UK remaining in the EU, although this tapered off later in the session.” – (Additional reporting: Bloomberg.)
