'Fat finger' spike for pound against the dollar

A suspected fat-finger trade sent the pound briefly rocketing against the dollar today as the currency’s turbulent ride ahead of the European Union referendum took another twist.

The latest spike in the currency came a day after the cost of insuring against falls in the pound hit a seven-year high.

The early morning trade, in a period of low activity in forex markets, pushed the pound 1.5% higher against the greenback in seconds to $1.4660, before falling back.

Carl Jani, chief executive of currency broker Argentex, said “so far all the chatter is it was a fat-finger error on an order”.

However, Jani added: “Given the size of the move it would have to be a colossal sum of money to do that. We’re talking billions and billions.”

Two polls which were showing a narrow lead for the Remain camp also ensured a stronger day for the pound.

This reassured traders after Brexit campaigners nosed in front last week. Following the early blip, sterling rose more than a cent against the dollar.

Neil Mellor, currency strategist at BNY Mellon, said that the pound’s see-saw activity signalled “a market on edge, where uncertainty is rife”.