Volatility Datapoint of the Day, Cable Edition

Check out what happened to the pound today: it closed at $1.633, and dropped as far as $1.53 before rallying back in the UK afternoon. That’s a ridiculous move for what’s ostensibly one of the world’s major currencies. But if you think that’s crazy, just look at what happened to GBPJPY, which went from 154 to 139 in the space of five hours.

To put it another way: a ¥3 million car was worth £19,500 in the morning and £21,600 a few hours later, thanks only to currency fluctuations. I’m not sure what this kind of FX volatility means for international trade, but hedging costs are going through the roof, which can’t help one bit.

Update: Alea has the chart.

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