Forex traders in Wimbledon were warned that they were in for a major bust this week as the UK’s forex market fell into freefall.
The British stock market index dropped 3.7 per cent on Thursday morning after hitting a three-month high on Thursday.
Forex trader Chris Moulds said the plunge had been triggered by the British government’s decision to hike interest rates by 50 basis points on Friday.
Mr Mould was among traders who had invested in forex products in the last few months and was worried about the potential impact on his business.
He said: “We’ve lost over half our trading revenue, which is really sad because we had a lot of sales and commissions coming in, so it’s going to hit us hard.”
Forex analysts warned that traders were at risk of losing millions if the market drops further into free fall.
Forex trader Andrew Smith said he had lost close to $3 million from his trading accounts and would not be able to continue until the market stabilises.
He added: “I’ve been doing a lot more trading over the last two weeks and it’s just not going to work.”
It’s going straight into free falls, it’s not even going to get out of the free fall.
“ForeX analyst Steve McQueen said the risk was that the forex boom could end and the market could plunge again.
He explained: “If the market goes down again, it could happen.
If the market does not, we could see the foreex bubble burst and we could go back to where we were.
“Foreex trading in the UK peaked in January at $1.5 trillion, but it has since plunged to less than $100 billion.