The British pound has borne the brunt of the markets’ punishment for last week’s vote in favor of a British exit from the European Union, or Brexit.
Sterling’s 7.64% drop Friday against the dollar was its largest drop since the collapse of the Bretton Woods currency system in the early 1970s.
The pound may be rallying a little on Tuesday, trading against the dollar at $1.3296, a gain of about 0.5% from the close on Monday, but, according to Deutsche Bank’s Jim Reid, this week has been one for the history books.
Only eight other days have been more negative for sterling since 1862 – more than 38,000 trading days.
Deutsche Bank put together a list of the most infamous drops. Here they are in reverse order:
8) 19 June 1866: (-7.76%).
7) 25 Sep 1931: (-7.89%) A few days after the gold standard was abandoned, the pound continued to depreciate, though it did jump by 7.14% the next day.
6) 10 May 1940: (-9.79%) War-related deviation from the dollar peg.
5) 25 Mar 1863: (-10.90%).
4) 20 Nov 1967: (-13.02%) Devaluation to battle the UK’s economic problems.
3) 30 Sep 1869: (-18.75%).
2) 21 Sep 1931: (-23.57%) Gold standard abandoned in the Depression.
1) 19 Sep 1949: (-30.41%) Pound devalued under Bretton Woods because of economic concerns.
And here is the chart: