The British pound dropped sharply against the U.S. dollar Thursday, as the greenback moved higher against other major currencies. The U.S. dollar index surged higher following the mystery move.
Traders could not immediately pinpoint a specific reason for the moves.
“Everyone is trying to figure out what was behind the mini flash crash in the pound, but there are no clear answers right now,” said Adam Button with ForexLive.com.
In afternoon trade, pound sterling suddenly hit an intraday low below $1.29, according to FactSet.
At first, some traders were quick to blame a so-called fat finger trade or computer program gone awry, but then the pound and other currencies followed through and traded lower against the dollar.
The U.S. dollar index climbed more than 0.4 percent to near 98.
On Wednesday, the U.S. dollar index hit a low of 97.481, its lowest since Nov. 9.
Pound sterling two-day move
Source: FactSet
Earlier on Thursday, pound sterling hit a high of $1.3047 against the dollar, its highest since September 29.
Also earlier, the Japanese yen hit 110.21 its strongest level against the dollar since April 25 and the euro briefly hit a high of $1.1171 against the dollar, the highest since Nov. 9.