Market Insider

Pound's shocking drop is 'part of the new normal'

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Huge drop in pound more than flash crash: Trader

The overnight plunge in the British pound is an example of a once-rare event that may soon become more frequent in currency markets, several analysts say. And wider volatility may follow.

Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said he's seen only about 10 instances of such sharp moves in a currency in the last few decades. But similar market gyrations could become more frequent among important currencies, given the pound's two large drops so far this year against the dollar, and the Swiss franc's surge against the dollar in January 2015 after the Swiss National Bank abandoned its euro peg.

"This is part of the new normal," he said.