ETF Trends
ETF Trends

The CurrencyShares British Pound Sterling Trust (NYSEArca: FXB) was a predictable victim of Great Britain’s decision to depart the European Union, also known as Brexit. On the back of last Thursday’s Brexit outcome, FXB tumbled nearly 8.4% on volume that was almost 29 time the daily average to a new 52-week.

Some market observers see more pain ahead for the British currency, which means more of the same for FXB. FXB tracks sterling’s price action against the U.S. dollar.

Earlier this year, FXB hit an all-time low as speculation intensified that Great Britain’s departure from the European Union is a real possibility. Market observers almost universally believe such an event would be pound negative. Moody’s has warned that it could downgrade U.K.’s credit rating if the country leaves the union. Some well-known asset managers and banks are chiming in, confirming that the pound and British stocks could suffer in the wake of a “Brexit.”

Related: 10 ETFs Hit the Hardest in ‘Brexit’ Fallout

“The British Pound dropped by 12% in a little over six hours as news of the referendum vote was filtered in to markets. This sent prices below the Financial Collapse low of 1.3500 before recovering; and that recovery has seen a 3.9% bounce off of the lows. And this is a currency, so a 3.9% movement in a day is jaw-dropping, much less a 3.9% movement retracing an earlier -12% slide,” said James Stanley, Currency Analyst at DailyFX, in a note out Friday.

In a knee-jerk reaction to the global sell-off following the Brexit tally, investors piled into the safety of U.S. Treasuries to preserve capital, pushing yields toward record lows – yields on benchmark 10-year Treasury notes plunged.

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