Pound plunges in wake of exit polls

The UK exit poll has dealt a huge blow to the Pound. It dropped 1.4 per cent moments after the preliminary results came in.

The poll predicts that the Conservatives will win the most seats, but fail to have a 326 seat majority. This means there will be a hung parliament and some sort of coalition government will need to be formed.

Last week, Deutsche Bank predicted a hung parliament with a Tory majority would make the Sterling less attractive to investors since it would give Theresa May less authority in Brexit negotiations.

Currency traders will be hoping that the exit polls are wrong.

“The market will be praying that this exit poll has got it wrong,” Lee Hardman, a currency analyst at MUFG, told the Financial Times. “Currency volatility is the best proxy for market fears; if the Conservative ship is sinking then the market will be looking for a life boat.”

 

Pound Coins from Flickr via Wylio
© 2010 William Warby, Flickr | CC-BY | via Wylio

Leave a Reply