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FOREX-'Flash crash' hits sterling; dollar falls on jobs data
October 7, 2016 / 2:17 PM / a year ago

FOREX-'Flash crash' hits sterling; dollar falls on jobs data

* Dollar softens after weaker-than-forecast payroll reading
    * Pound's sudden plunge in early Asia trade shakes markets
    * Pound later rebounds from low but still down 2 pct on day

 (Updates market action, changes dateline from LONDON)
    By Richard Leong
    NEW YORK, Oct 7 (Reuters) - The sterling tripped lower on
Friday on what traders called a "flash crash" that knocked the
currency to a 31-year low, while the dollar slipped on news of
unexpectedly weak U.S. job growth in September. 
    Even before a sudden plunge that briefly shaved a tenth of
the pound's value during Asian trading, the sterling was on
track for its worst week since January 2009 as some national
leaders call for Britain to make a "hard" exit from the European
Union.
    "I think it's a warning shot from the markets to the UK
about what type of potential volatility in sterling we may see
down the line," said Shahab Jalinoos, global head of FX strategy
at Credit Suisse in New York.
    On Friday, the pound plunged about 10 percent from levels
around $1.2600 to $1.1378 in a matter of minutes in
thin early Asian trading.
    Thomson Reuters later revised that low to $1.1491, which was
still the weakest level for sterling since 1985. The company,
which owns the Reuters foreign exchange brokerage platform RTSL,
said an outlying trade had been cancelled.    
    Sterling retraced to $1.2391 in U.S. trading but
was still down 1.8 percent on the day.
    The pound pared its earlier losses as other major currencies
strengthened against the dollar in reaction to a U.S. government
report that showed a 156,000-job gain last month, which was
below the 175,000 increase forecast among analysts polled by
Reuters. 
    The dollar index was last down 0.2 percent at 96.554.
It rose to a more than two-month high shortly before the release
of the September non-farm payrolls report.
    Currency bid prices at 9:55AM (1355 GMT)
 Description  Last           U.S. Close  Pct Change  YTD Pct
                              Previous                Change
                              Session                
 Euro/Dollar  $1.1192        $1.1149     +0.39%      +3.06%
 Dollar/Yen   102.9800       103.9300    -0.91%      -14.53%
 Euro/Yen     115.24         115.91      -0.58%      -12.53%
 Dollar/Swis  0.9778         0.9802      -0.24%      -2.40%
 s                                                   
 Sterling/Do  1.2420         1.2614      -1.54%      -15.73%
 llar                                                
 Dollar/Cana  1.3237         1.3216      +0.16%      -4.35%
 dian                                                
 Australian/  0.7612         0.7582      +0.40%      +4.63%
 Dollar                                              
 Euro/Swiss   1.0944         1.0935      +0.08%      +0.53%
 Euro/Sterli  0.9010         0.8832      +2.02%      +22.30%
 ng                                                  
 NZ           0.7181         0.7159      +0.31%      +5.22%
 Dollar/Doll                                         
 ar                                                  
 Dollar/Norw  8.0480         8.0429      +0.06%      -8.96%
 ay                                                  
 Euro/Norway  9.0088         8.9750      +0.38%      -6.17%
 Dollar/Swed  8.6177         8.6308      +0.29%      +2.47%
 en                                                  
 Euro/Sweden  9.6455         9.6180      +0.29%      +4.81%
    

 (Additional reporting by; Sam Forgione in New York; Anirban Nag
in London; Masayuki Kitano in Singapore; Editing by Lisa Von
Ahn)

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