Pound traders glued to desks ahead of vote


Cur­rency traders are tak­ing no chances as the U.K. Parliament’s Brexit vote late Tues­day will come dur­ing thin liq­uid­ity head­ing into the mar­ket’s witch­ing hour.

Money man­agers are can­cel­ing evening plans to stay at the of­fice to ensure they don’t miss mar­ket swings like those seen dur­ing ster­ling’s 2016 flash crash or the chaos that fol­lowed the Swiss Na­tional Bank un­ex­pect­edly drop­ping its cur­rency floor in 2015. The pound could move as much as 6 per­cent in ei­ther di­rec­tion de­pend­ing on the vote’s out­come, strate­gists say.

“That’s one of the SNB lessons learned, there were a lot of less ex­pe­ri­enced peo­ple on the desk,” said Alan Sch­warz, New Jer­sey-based CEO of FXSpotStream, a trading venue launched by banks. “I will guar­an­tee you a lot of the most se­nior peo­ple at the banks will be at their desk or will be able to get to it.”

With the mem­ory of the 2016 plunge in the pound pro­voked by thin liq­uid­ity in Asian hours still on their minds, traders will be hop­ing the vote doesn’t come too late. The re­sult is due around 8:30 p.m. U.K. time, but a de­lay could see it pushed be­tween the end of the New York close and the start of trading in Tokyo.

A rel­a­tively small short­fall in the votes Prime Minister Theresa May needs to pass her deal could ac­tu­ally spur gains in the cur­rency on the prospect of talks for a sec­ond at­tempt, ac­cord­ing to strate­gists. A large loss ig­nites risks in­clud­ing a no­con­fi­dence vote, a push for a sec­ond ref­er­en­dum or an elec­tion, which would drive ster­ling lower.

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