Forex markets respond to NO

Sitting watching Alex Salmond acknowledge the results of the Scottish referendum, there is a great example of the speed with which the foreign exchange markets respond to news. Sterling fell significantly in value over the last two weeks, with polls suggesting that the 'Yes' campaign was much closer to a win than had previously been expected. However, as the vote closed on Thursday evening, exit polls were indicating a win for the 'No' vote, and, as the chart from Bloomberg above shows, the global 24-hour foreign exchange market showed an immediate and dramatic response in demand for the pound, as the uncertainties associated with Scottish independence were removed.

Against the euro, the pattern is very similar:

Both charts show how swiftly currency traders need to move in order to maximise their profits - leave the desk for a coffee, or hesitate for a while before making their move, and the rate at which they sell can be drastically different. Delaying for six minutes after the high point just after 9.30pm could have meant a loss of over £3,000 on a sale of £1mn.