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Saturday, October 8, 2016

What was the cause of the British pound's flash crash?

Last Friday, the British Pound fell -6% in less than 2 minutes, approximately completing a move that some market forecasters had predicted would happen over a period of six months. What was possibly initial human error, reacting to a new story, was most likely compounded by machine trading at a time of low market liquidity, causing a massive move in the British Pound.

The attached article is quite informative and contains a timeline of similar flash crashes that have occurred in recent history.

http://www.telegraph.co.uk/business/2016/10/07/what-caused-the-sterling-flash-crash-overnight/