The pound plunged Friday as early results from the British referendum on European Union membership showed a close vote.
The British currency dropped sharply against the dollar after the northern English city of Sunderland voted strongly in favor of leaving the EU. Amid volatile trading, it sank close to $1.40 after earlier touching $1.50, its highest level since December.
“The Sunderland result has definitely altered the tone … and markets are getting very choppy,” said Joe Rundle, head of trading at ETX Capital.
Newcastle, another big northern city, voted narrowly to remain. The City of London, the capital’s financial district, also voted in favor of staying. Counting is still under way in hundreds of other local areas in what was the first direct vote on the U.K.’s ties with Europe since 1975.
The edgy mood prompted wild swings in Asian stock markets. Japan’s Nikkei plummeted as much as 3% before clawing back most of its losses in morning trading. The Hang Seng in Hong Kong opened down 1.8%, but then regained ground.
Markets in the U.K. will open Friday at 8 a.m. local time / 3 a.m. ET. Official results are not expected until later in the day.
“The markets have been betting on remain in the past few days, and when the first results came in, that has reversed,” said Vicky Pryce, an economist and former U.K. government official.
On Thursday, investors had been growing increasingly confident that the country would vote to remain a member of the 28-nation bloc. The pound made gains, and U.S. and European stocks rose.
Concerns over Britain potentially choosing to leave the EU have caused turmoil in international markets in recent weeks. The FTSE 100 seesawed violently and the pound was more volatile than even during the 2008-2009 financial crisis.
A record number of voters registered to vote in the referendum. Fierce campaigning has split the country down the middle, with opinion polls ahead of the vote too close to predict the result.
The campaign was temporarily suspended after the killing of Labor MP Jo Cox last week.
Migration and the the economy dominated the debate.
Campaigners for a British exit (Brexit) say the U.K. can only control immigration if it leaves the EU, which insists on free movement of people across the union. Campaigners for Britain to remain an EU member say walking out of the biggest free trade area in the world would do irreparable damage to the economy.
— Judy Kwon contributed reporting.