Schamotta said upcoming events that could produce market swings this year include the U.S. presidential election, a possible U.S. Federal Reserve rate hike and December's Italian referendum on constitutional reform, which he said "looks like a particular trigger that many (market) participants look to hedge levels against."
The Italian referendum could raise further questions on the future of the euro zone, because Italy's Prime Minister Matteo Renzi has said he would resign if the constitutional reforms are not passed. There are fears that his departure could lead to a populist party coming to power in Italy, which is already in the midst of a banking crisis. (Italians are voting to decide whether to streamline their law-making process.)
Ahead of those potential market-moving events, the pound suddenly dropped Thursday evening New York time from around $1.26 to $1.145, a fresh low going back to 1985, according to Reuters.
There was no specific trigger behind the more than 9 percent snap lower, analysts said. They pointed to a lack of buyers and sellers in the hours between the U.S. market close and the Asia open, and automated selling pressure from computer programs as the pound broke below key levels.
Sterling has been under pressure all week amid renewed focus on the June 23 vote by the U.K. to leave the European Union, which knocked the pound from roughly $1.50 to around $1.30.
Last weekend, U.K. Prime Minister Theresa May said that the nation would begin the official process of leaving the EU "no later than the end of March." Subsequent headlines have raised market concerns about a serious break in U.K. and European Union trade relations, or a so-called hard Brexit, versus previous hopes that negotiations would essentially preserve the existing economic relationship.
Then overnight Thursday, French President Francois Hollande indicated in strong terms that the United Kingdom should face consequences for the Brexit vote. "There must be a price," Hollande said.