Algorithmic trading is Probably to blame for pound's 'flash crash

Algorithmic trading might be to blame for last 'flash crash' in which the pound plunged by as much as 6 percent against the dollar during trading in Asia. The pound fell to a 31-year low of $1.1841, more than six percent, in a matter of minutes.The Bank said it is 'looking into the cause of the sharp fall', but experts have pointed the finger towards algorithmic trading. The extent and speed of the drop-add to signs that bouts of extreme volatility are becoming more commonplace in the global currency market as the volume of transactions decreases and algorithmic traders pick up market share. The FCA has said it is keeping a close watch on algorithmic traders of the type that may have been connected with the dramatic crash.