--- title: FX Market Structure Plays Role in Flash Crash description: Politics, technology, and thin liquidity all had a hand in the pound's early morning pummeling. --- ![websites-group](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/new-MMG-01.svg) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-new-marketsmedia-logo.svg)](https://www.marketsmedia.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-traders-redlogo.svg)](https://www.tradersmagazine.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-bestexe-logo.svg)](https://www.bestexecution.net/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-fidesk-logo.svg)](https://www.fixglobal.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-fixglobal-new-logo.svg)](https://www.fixglobal.com/) - [*Facebook*](https://www.facebook.com/MarketsMedia/) - [*Twitter*](https://twitter.com/marketsmedia) - [*Linkedin*](https://www.linkedin.com/company/markets-media-llc) - [Newsletter](https://articles.marketsmedia.com/fx-market-structure-plays-role-flash-crash#popup-newsletter) #### Want the latest news on securities markets -- FREE? Sign up to receive exclusive articles on topics including: - Equity market structure - Profiles of buy-side investment firms - The evolution of multi-asset-class trading - Regulation and its implications for markets - The search for liquidity in fixed income markets - The convergence of fintech and capital markets Select one or more newsletters you would like to receive: menu [![Markerts media](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/header%20logo.svg "Markerts media")](https://articles.marketsmedia.com/) - [Institution](https://articles.marketsmedia.com/tag/institution) - Institution - FX Market Structure Plays Role in Flash Crash Search - [Home](https://articles.marketsmedia.com/) - [Trending](https://articles.marketsmedia.com/tag/trending) - [Featured](https://articles.marketsmedia.com/tag/daily-email-feature) - [Sectors](https://articles.marketsmedia.com/tag/sectors) - [From The Markets](https://articles.marketsmedia.com/tag/from-the-markets) - [AWARDS](https://articles.marketsmedia.com/tag/events) - [Newsletter](https://awards.marketsmedia.com/newsletter-sign-up) - [Newsletter](https://articles.marketsmedia.com/fx-market-structure-plays-role-flash-crash#popup-newsletter) Hide search Search - NewsLetter ![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/trading-up-occ-iex-select-board-members-citadel-lands-lieblich-573x379-Jul-07-2022-09-34-11-57-AM.jpg) [ON THE MOVE: Citi Hires Artie Ambrose;...](https://articles.marketsmedia.com/on-the-move-citi-hires-artie-ambrose-natalie-a-brown-to-mesirow) ![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/Depositphotos_445735906_L.jpg) [Trading Adapts to ESG and Sustainable...](https://articles.marketsmedia.com/trading-adapts-to-esg-and-sustainable-investing) ![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/iStock-917493152-Jul-07-2022-09-34-19-09-AM.jpg) [Focus on FX Execution Connectivity](https://articles.marketsmedia.com/focus-on-fx-execution-connectivity) ![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/Depositphotos_333839538_L.jpg) [TRACE Turns 20](https://articles.marketsmedia.com/trace-turns-20) 10.07.2016 By Rob Daly Institution # FX Market Structure Plays Role in Flash Crash 10.07.2016 By Rob Daly [Share](https://www.facebook.com/share.php?u=https://articles.marketsmedia.com/fx-market-structure-plays-role-flash-crash) [Tweet](https://twitter.com/intent/tweet?text=US+ETFs+Have+Record+Net+Inflows&url=https://articles.marketsmedia.com/fx-market-structure-plays-role-flash-crash) [Share](https://www.linkedin.com/cws/share?url=https://articles.marketsmedia.com/fx-market-structure-plays-role-flash-crash) Friday morning Bloomberg reported that the GBP/USD trading had dropped a massive 6,1% for a few minutes during early Asian trading. Market watchers attributed the momentary plunge in trading to multiple reasons including a *Financial Times* story in which French President François Hollande indicated the EU’s hard line stance over Brexit. The foreign-exchange market’s fragmented nature also contributed to the situation as participant place the same liquidity among different trading venues, explained Kamal Sharma, senior G10 FX strategist at Bank of America Merrill Lynch. “The market remains relatively fragile and this phantom liquidity is creating some kind of illusion of stability,” he told *Markets Media*. “We have had some occasions over the past two to three years where we’ve had significant moves in exchange rates and volatility. You can go back to a dovish Fed at the beginning of January 2015, weak multi-factor productivity, Brexit, the Fed’s rate hike at the end of last year.” The Bank of England has confirmed in press reports that it will be investigating the pound’s rapid trading dip. In the meantime, it would not be accurate to call the incident a ‘“flash crash,” according to a Thomson Reuters spokesperson. “The absolute low traded, and confirmed, in GBP/USD on Thomson Reuters Matching was 1.1491,” she noted. “We also published a ‘market low’ where a good amount of GBP 5 million or more was traded in a three-minute window. This low was 1.1500 and happened around the same time as the absolute low.” No matter what the market calls it, such an event happening to one of the most liquid currency pairs has not occurred in recent memory, said Sharma. The closest situation in terms of magnitude that he could identify was when the Swiss Nation Bank abandoned the Swiss franc’s 1.20 peg to the euro in early January 2015. “We had a significant sell off in EUR/CHF,” Sharma added. “That’s the closest to where we’ve seen a significant spike in volatility of the kind that we saw today.” For More on Foreign Exchange: - [McKay Brothers lowers latency on Carteret-NY2](https://www.marketsmedia.com/mckay-brothers-lowers-latency-carteret-ny2-link/) - [ITG Completes TCA Integration with FX Connect](https://www.marketsmedia.com/itg-completes-tca-integration-fx-connect/) - [FastMatch Joins IPC’s FX Hub](https://www.marketsmedia.com/fastmatch-joins-ipcs-fx-hub/) [Share](https://www.facebook.com/share.php?u=https://articles.marketsmedia.com/fx-market-structure-plays-role-flash-crash) [Tweet](https://twitter.com/intent/tweet?text=US+ETFs+Have+Record+Net+Inflows&url=https://articles.marketsmedia.com/fx-market-structure-plays-role-flash-crash) [Share](https://www.linkedin.com/cws/share?url=https://articles.marketsmedia.com/fx-market-structure-plays-role-flash-crash) ![email](https://articles.marketsmedia.com/hubfs/Markets%20Media/email.svg) ### NEWSLETTER SIGN UP And receive exclusive articles on securities markets ### Related articles 1. [![](https://articles.marketsmedia.com/hs-fs/hubfs/Imported_Blog_Media/EMCA-WINNERS.jpeg?width=376&height=250&name=EMCA-WINNERS.jpeg)](https://articles.marketsmedia.com/european-markets-choice-awards-2022-the-winners) Latest News ## [European Markets Choice Awards 2022 – The Winners](https://articles.marketsmedia.com/european-markets-choice-awards-2022-the-winners) On 5 June Markets Media held its first in person European Markets Choice Awards event in London. 07.06.2022 By Markets Media 2. [![](https://articles.marketsmedia.com/hs-fs/hubfs/Imported_Blog_Media/trading-up-occ-iex-select-board-members-citadel-lands-lieblich-573x379-Jul-07-2022-09-34-11-57-AM.jpg?width=376&height=250&name=trading-up-occ-iex-select-board-members-citadel-lands-lieblich-573x379-Jul-07-2022-09-34-11-57-AM.jpg)](https://articles.marketsmedia.com/on-the-move-citi-hires-artie-ambrose-natalie-a-brown-to-mesirow) Daily Email Feature ## [ON THE MOVE: Citi Hires Artie Ambrose; Natalie A. Brown to Mesirow](https://articles.marketsmedia.com/on-the-move-citi-hires-artie-ambrose-natalie-a-brown-to-mesirow) The weekly recap of new hires, promotions and job changes in capital markets trading and technology. 07.05.2022 By Anna Lyudvig, Traders Magazine 3. [![](https://articles.marketsmedia.com/hs-fs/hubfs/Imported_Blog_Media/339299_345359258874293_1089957387_o.jpg?width=376&height=250&name=339299_345359258874293_1089957387_o.jpg)](https://articles.marketsmedia.com/summer-trading-2012-10-years-on) Latest News ## [Summer Trading 2012, 10 Years On](https://articles.marketsmedia.com/summer-trading-2012-10-years-on) A look back at a Markets Media event from a decade ago. 07.05.2022 By Traders Magazine [![MarketsMedia](https://articles.marketsmedia.com/hubfs/MarketsMedia.svg "MarketsMedia")](http://marketsmedia.com) - [About us](https://www.marketsmedia.com/about-us) - [Careers](https://www.marketsmediagroup.com/careers) - [Contact](https://www.marketsmediagroup.com/contact) - [Advertise](https://www.marketsmediagroup.com/advertise) - [Newsletter](https://awards.marketsmedia.com/newsletter-sign-up) - [Corporate Site](https://marketsmediagroup.com) - © 2026 Markets Media Holdings LLC - - Terms & Conditions - Privacy Policy {{ standard\_footer\_includes }}