Flash Crash? The British Pound Collapsed 6% In One Minute Last Night

The British pound suffered its most drastic sell-off since the Brexit vote Thursday evening and fell more than 6 percent in just one minute.

The British pound nosedived to as low as $1.1841 from $1.26 around the time Asian markets opened for trading. Some reports attribute the plunge to comments made by France's President Francois Hollande, who hinted that his government is committed towards playing hardball in any Brexit negotiation.

#Pound #GBP now on track for worst week since #Brexit vote -down 4.1% compared to 4.7% week ended June 24. For more: https://t.co/JYb9zMNH14 pic.twitter.com/tv2ri9hSll

— Tara Cunningham (@TaraSCunningham) October 7, 2016

"There must be a threat, there must be a risk, there must be a price," CNBC quoted the French leader as saying.

"The U.K. has decided to do a Brexit … Well, then we must go all the way through the the U.K.'s willingness to leave the EU. We have to have this firmness," he added.

The Wall Street Journal noted that Hollande's comments came at a time when liquidity in the foreign exchange market is light. The lower than usual trading volume could have exacerbated the selloff and then triggered automatic sell orders from automated trading systems, which identified a key technical level in the currency.

Other currency experts have a different opinion of what happened.

"A sudden move in a very quiet time not linked to any information is highly unlikely to be due to any algorithm," WSJ quoted Lyle Pakula, chief investment officer of Melbourne-based hedge fund AE Capital, which uses automated computer programs to make trading decisions as saying. "In my opinion, the source of the run is likely due to a discretionary trader trying to push the market."

The Bank of England told WSJ it's "looking into" the causes of the currency's crash.