Pound Slides as UK Vote Springs Hung Parliament Before Brexit
- Author: Zachary Reyes Jun 10, 2017,
Jun 10, 2017, 14:24
Sterling also plummeted off the back of the result, having dropped 1.7% against the U.S. dollar since Thursday evening to trade at 1.27 - its lowest level since mid-April.
It would make British exports more price competitive around the world - something that was reflected in a rise in shares for major British companies on Friday. The Labour party leads at this point of time and there have been calls for the resignation of May but so far, she has remained defiant and expressed her confidence that she would be able to cobble together a simple majority with the help of other parties. Britain's FTSE 100 index rose 1 percent, and the pan-regional FTSEurofirst 300 index of leading European shares rose 0.36 percent to 1,534.20.
By 0150 GMT sterling had shed 1.2 percent to $1.2785 GBP= , having earlier carved out a two-month trough of $1.2693.
The pound gained as much as 4pc after May called a snap election seven weeks ago, as polls then suggested a landslide win for her Conservative Party would bolster the prime minister's position when Brexit negotiations open later this month.
The FTSE 100 index of the UK's largest companies has performed well since last year's vote for Brexit, as the weakness of the pound offered a boost to overseas earning companies.
However, Sterling has stabilised somewhat in the final days of the campaign, thanks to investors continuing to bet that the Conservatives will hold onto their majority in line with convention wisdom. The fall in United Kingdom stock futures was negated by a sharp drop in the pound which tends to boost the multinational FTSE index.
The euro had less luck on the USA dollar, easing 0.3 percent to $1.1182 and testing support under $1.1190.
That still left sterling down 1.7 percent against the dollar on the day and on track for its biggest one-day fall since last June, though that move was dwarfed by an nearly 8 percent dive the day after last June's European Union referendum.
However, this isn't the lowest the pound has sunk against the Sing dollar.
But the Telegraph says there is now a view that a hung parliament, which could require a compromise agreement to form a government, could be the most likely way to do this.
But yields have since bounced from the lows as risk aversion ebbed.Comey accused President Donald Trump of firing him to try to undermine its investigation into possible collusion by his campaign team with Russia's alleged efforts to influence the 2016 presidential election.While this was the most eagerly anticipated US congressional hearing in years and was approached by investors with caution, it did not offer fresh insight for the financial markets. Highly rated sovereign bonds were in demand with USA 10-year Treasury futures TYc1 gaining 2 ticks.
Comey accused Trump of firing him to try to undermine the investigation into possible collusion by his campaign team with Russia's alleged efforts to influence the 2016 election.
Brent crude oil settled 29 cents higher at $48.15 a barrel, and US crude rose 19 cents to settle at $45.83.