I gathered together a few comments to add what Adam and I covered earlier when sterling dropped early in Tokyo

And, more now..

CNBC gathers these together:

  • Because there was no news so far to justify the pound's wild swing, it could be the result of a fat finger, said Elias Haddad, senior currency strategist at Commonwealth Bank of Australia
  • John Gorman, head of non-yen rates trading at Nomura Securities, said via email that there were two theories floating around."First, it was a fat finger or a trade entered mistakenly. The second possibility, which sounds more reasonable, is that there is a large barrier option that traded and that caused the selloff in light liquidity."
  • But because other currencies did not see corresponding moves, it may not be a liquidity issue, flagged ‎UBS' chief Asia-Pacific investment officer Kelvin Tay.
  • "Usually, fat finger errors don't have the continuity that we're seeing right now. There's a chance that it might been an error but I don't think we haven't seen the last of the lows," Ashraf Laidi
  • Kathy Lien, managing director of foreign exchange strategy at BK Asset Management."It's a low liquidity sell-off. Typically when we see this, the reversal is violent but with fundamental support, the pound could find a new range between 1.22 and 1.25 per dollar,"

more via Reuters:

  • "This was even a bigger move than what we saw after the Brexit vote. There were almost no offers, no bids when this happened," said a trader at a European bank in Tokyo.
  • "A few stops got triggered in early trading and once cable broke 1.20, option barriers sent it lower," said Gerrard Katz, head of Asian FX sales and trading at Scotiabank said. "The broader market impact has been limited and cable should consolidate between the 1.20 and 1.25 levels."