**Hammond urges calm over pound flash crash
Chancellor Philip Hammond has responded to the flash crash in sterling saying that market turbulence is to be expected, but the UK economy is fundamentally strong.
The pound was pummelled in the currency markets in Friday Asian trading, with traders blaming concerns over Brexit and a flash crash that hit the market.
The pound briefly fell 6% to $1.1841, the biggest move since the Brexit vote.
Sterling later recovered most of those losses but remained 1.3% lower.
Analysts think a news report could have triggered automated trading systems to sell the pound heavily in a short space of time…
The pound is heading for one of its worst weeks against the dollar since the financial crisis, with a loss of around 4% for the week.
“The big issue for the pound right now is that it has become detached from the economic fundamentals and politics have become king. This is where things will get dangerous for the currency going forward,” said Kathleen Brooks, research director at City Index.
“Theresa May’s hard-line on Brexit negotiations and her insistence that negotiations will take place in private have only increased uncertainty for the market, with traders left combing news websites for the latest headlines to try and gauge for themselves the state of play between the UK and the EU,” she added.**