Sterling, stocks rise as markets bet Britain will remain in EU

British markets plunged on Friday, with sterling hitting a 31-year low in its biggest fall on record and United Kingdom stock futures pointing to a steep fall at the market open after Britons voted to leave the European Union.

After the overnight victory for Leave overnight, the value of the Sterling dropped dramatically, falling sharply against the dollar and the Euro. In that poll, most saw the pound plunging below $1.35 the day after the vote. He added: “There is likely to be two years of varying degrees of market volatility because of the plethora of unknowns”.

The Bank of England said it would take “all steps necessary” to ensure financial stability as a result of the decision.

By 1150 GMT, it recovered to trade at $1.37, still 7.8 percent lower on the day, with traders citing Bank of England chief Mark Carney’s comments that the central bank stood ready to provide extra support as a reason for the bounce.

A risk-off mentality has now gripped financial markets around the world as investors and traders wait to find out what the next step is for the United Kingdom and the rest of the EU.

“Arguably the exit vote is now priced into sterling as the United Kingdom wakes up to “Independence Day”.

Cameron has made clear he “remains the prime minister and will carry out the instructions of the British people”, said Mr Hammond.

Investors were shocked on Friday morning to find that the United Kingdom had voted to leave the European Union, a decision that prompted the EUR/GBP exchange rate to surge strongly. If the “Leave” campaign does enjoy a late surge of support which sees it win the day, then the Pound Sterling is forecast to plummet.

Leading UK bank HSBC also cut its quarter end and year-end forecasts for sterling.

“Sterling is getting smackadoodled”, said Tim Kelleher, Head of FX Institutional Sales New Zealand for ASB Bank in Auckland.

The Pound was down 6.4% to 1.2222 against the Euro.

As feared, Brexit will directly effect other European Union countries that use the single currency.

The referendum results fanned worries that it could lead to further discontent among European integrations and rise towards nationalism or regionalism, with an election re-run planned in Spain on Sunday after an inconclusive election last December.

Reuters Dublin issued this tweet detailing just how badly affected the individual stocks of Bank of Ireland, Ryanair, Permanent TSB and Smurfit Kappa have been hit as a result of the EU Referendum.

The dollar was last up 1.37 percent against the Swiss franc at 0.9713 franc CHF= after the Swiss National Bank became the first major central bank to intervene and weaken its own currency in reaction to Britain’s vote.

Oil prices settled 5 percent lower on Friday after Britain’s vote to leave the European Union spurred massive risk aversion and a rally in safe havens like the US dollar that threatened to cut short a three-month-long recovery in global oil markets.

Morgan Stanley expects the pound to fall to between $1.25 and $1.30.