Referendum
A public vote on a single question, which can shake currencies badly when the result is uncertain.
In plain English
A public vote on a single question, which can shake currencies badly when the result is uncertain.
A referendum puts one question straight to voters: leave or remain, yes or no. Markets hate them because the outcome is binary and polls can be wrong.
The textbook case: the UK's 2016 Brexit referendum. As results came in overnight, the pound crashed by around 10% against the dollar, one of its biggest one-day falls in decades. Traders often cut positions before such votes because a gap can blow straight through stop-losses.
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