Pound slides after exit polls predict hung parliament

Ivan Schwartz
June 11, 2017

It later hovered more than 2% lower as trading got into gear in London, at $1.2648, after a hung parliament became clear - leaving the currency on course for its biggest one day fall since October's so-called flash crash.

The dollar index against a basket of major currencies was up 0.3 per cent at 97.221.

The situation where no party has a majority is known as a hung Parliament.

"On balance, the financial markets and the private sector would have preferred a Conservative majority to a Labour majority. and they definitely prefer stability to instability", said Tony Travers, director of the Institute of Public Affairs at the London School of Economics. The euro steadied at $1.1203, having found support around $1.1193. If sterling continues to weaken, expect gains for industries that rely on sales overseas, such as healthcare and materials, and losses for real estate, utilities and consumer durables, Pierre Martin, a trader at Saxo Bank A/S in London, said in a phone interview. The polls narrowed in the last few days so to some extent it is not completely unexpected, but it is still a surprise and markets will need to digest what this means.

Tom Elliott, DeVere Group's global investment strategist, believes a Tory majority of more than 60 would "vindicate" May's decision to call an election, and enable her to "effectively ignore the estimated 30 or so Conservative MPs who want as hard a Brexit as possible".

"Britain's exit from the European Union will continue regardless of the political turmoil likely to be created by the election results".

The Fed ends a two-day meeting on Wednesday.

Japan's Nikkei added 0.8 percent and MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.3 per cent.

Kathy Griffin addresses fallout from bloodied Trump head photo
Harth, a makeup artist hired to work with him on his pageant business, said he groped and sexually assaulted her in 1997 . Griffin, who has apologised for the bad joke, says she is a victim of bullying at the hands of the Trump family.

Gulf row threatens whole region, diplomacy only option
Saudi Arabia, the UAE, Egypt and Bahrain gave Qatari citizens 14 days to leave and closed their airspace to all Qatari flights. Gargash said "not using the formidable media ownership in promoting an extremist agenda" was a condition for negotiations.

SHOCKING: Shoot of Saif Ali Khan starrer Baazaar stalled by BMC
Xavier's ground. "We have also submitted a written complaint to the Bhoiwada police", he said. The Rangoon actor has also been informed that he's will be penalised for the offence.

The probability of a clean divorce from the European Union, a so-called "hard Brexit", can play out in different ways.

There was much less drama elsewhere, as the Japanese yen gave up early gains and eased to 110.38 per dollar.

But the common currency was capped after the European Central Bank on Thursday cut its forecasts for inflation and said policymakers had not discussed scaling back its massive bond-buying programme.

Italian bond yields fell again on Friday as the head of the country's ruling Democratic Party, Matteo Renzi, said he was pessimistic over the chances of reaching a new cross-party pact on a reform of the electoral law.

The dollar and USA markets are under pressure ahead of a testimony by former FBI chief James Comey to Congress later today about whether United States president Donald Trump tried to influence an investigation over his adminstration and its links to Russian Federation. "Trump's economic agenda to go through". In commodity markets, spot gold was a whisker lower at $1,274.30 an ounce.Oil prices remained subdued with Brent having settled at its lowest since November 29, the eve of an OPEC production cut deal.USA crude futures edged up 2 cents to $45.66 a barrel, with Brent crude up 4 cents at $47.90.

Paris rose 0.3 per cent and Frankfurt was flat. Highly rated sovereign bonds were also in demand with U.S. 10-year Treasury futures gaining 5 ticks.

Oil prices remained subdued with Brent having settled at its lowest since November 29, the eve of an OPEC production cut deal.

Other reports by GizPress

Discuss This Article