At 9:30 a.m. Thursday, trading floors across London erupted.
Bloomberg News reports that outbursts of obscenities and confusion followed the Swiss central bank’s surprise decision to abolish its three-year-old policy of capping the Swiss franc against the euro, according to traders in London’s financial district.
The U-turn sent the franc as much as 41% up against the euro, the biggest gain on record, a move that one trader estimated may cause billions of dollars of losses for banks and their customers.
Dealers at banks including Deutsche Bank, UBS and Goldman Sachs battled to process orders amid a flood of customer calls and trade requests, according to people with direct knowledge of the events. At least one electronic currency-trading system temporarily halted transactions, adding to the mayhem.
This is the biggest currency shocker in years and it’s likely to create more volatility in the short term', said James Stanton, head of foreign exchange at deVere Group, a financial adviser that oversees about $10bn.
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