FRIDAY 9TH JUNE 2017
The UK took to the polls yesterday in GE2017 and it is fairly safe to say that Prime Minister Theresa May didn’t get the result she was hoping for.
The pound was left reeling as the votes were calculated and the Conservatives fell short of the 326 seats required for a majority.
GBP/EUR dropped from €1.1552 to €1.1314, GBP/USD slid from $1.2975 to $1.2655, GBP/AUD fell from AU$1.7189 to AU$1.6812 and GBP/NZD careened from NZ$1.8008 to NZ$1.7578.
Is there further for the pound to fall? Keep scrolling to find out!
CHECK OUT THE RATE
“The fallout from the election will be the driving force behind GBP exchange rate movement over the rest of the day”
What’s been happening?
The pound surged back in April when PM Theresa May called the snap election on the widely held belief that the Conservatives would storm their way to an increased majority.
Bets that a landslide victory would strengthen Theresa May’s hand in Brexit negotiations initially kept the pound elevated, but the currency started losing ground as a rocky campaign left her victory in doubt.
GBP exchange rates dropped 2% as last night’s exit polls pointed to a hung parliament, and this time the polls proved accurate.
While these movements are hardly as dramatic as seen following the EU referendum last year, there could be further shifts on the horizon.
With the Conservatives failing to secure the required majority, the UK’s political landscape looks murkier than ever.
If Theresa May listens to calls for her resignation the situation will be even more tenuous with only days left until Brexit negotiations are due to commence.
What’s coming up?
The fallout from the election will be the driving force behind GBP exchange rate movement over the rest of the day, with any shocking announcements (like Theresa May’s resignation) having the potential to extend the pound’s losses.
However, a rapid turnaround in coalition talks and the quick establishment of a working government could help the pound recover.
Although the UK is set to publish industrial/manufacturing production, construction output, trade and growth figures, the data is unlikely to have an impact with eyes so firmly focused on the outcome of yesterday’s historic vote..