#Vote2017: 'No panic yet' after pound hit by election shock

#Vote2017: 'No panic yet' after pound hit by election shock

The pound remained in the doldrums after it was confirmed that the UK Conservative Party has lost its parliamentary majority.

Sterling fell 1.5% to 1.27 US dollars in overnight Asian trading and over 1.5% to €1.13, but most of the losses came following a shock exit poll late on Thursday.

Craig Erlam, senior market analyst at OANDA, said that there was "no panic yet".

"The drop in GBP/USD after the exit polls was very significant but even then, it remains slightly above the level that it was trading at prior to (Theresa) May calling the election back in April.

#Vote2017: 'No panic yet' after pound hit by election shock

"Clearly there is no panic yet but should coalition talks fail and the prospect of another election prevail, I struggle to see it maintaining these levels and it would seriously harm the UK's position in Brexit talks and create huge uncertainty."

Markets had priced in a healthy Conservative majority, giving Theresa May free rein to take charge of Brexit negotiations unhindered.

However, others believe that a hung parliament increases the likelihood of a softer Brexit, which could be supporting the pound and preventing it going into freefall.

Kathleen Brooks, research director at City Index, said: "Perhaps the market is looking at this result as a vote for a softer Brexit, which could boost the pound in the long run."

More on this topic

British police ’formally considering’ allegations Tories broke law due to call centre use British police ’formally considering’ allegations Tories broke law due to call centre use

UK government's 'shabby deal' with DUP branded a threat to Good Friday AgreementUK government's 'shabby deal' with DUP branded a threat to Good Friday Agreement

Everything you need to know about the Conservative-DUP dealEverything you need to know about the Conservative-DUP deal

Theresa May has bought herself time but she remains on probation, warns Tory MPTheresa May has bought herself time but she remains on probation, warns Tory MP

More in this Section

Legislation to test self-driving cars on Irish roads approvedLegislation to test self-driving cars on Irish roads approved

Businessman who defrauded Revenue of €160k jailed for two yearsBusinessman who defrauded Revenue of €160k jailed for two years

Opec strikes deal with Russia to cut crude oil productionOpec strikes deal with Russia to cut crude oil production

Manchester United link up with Chinese company Alibaba GroupManchester United link up with Chinese company Alibaba Group


Lifestyle

Sating the festive appetite is what Christmas is all about, here Joe McNamee takes us through the best culinary delights that are produced right here on our doorstep.Want to give local this Christmas? Joe McNamee rounds up the the country's very best food produce

Architect and artist Harry Wallace tells Eve Kelliher how his style has evolved.How a lifetime as an architect has inspired Cork artist Harry Wallace

Don’t let present stress ruin your run-up to Christmas. Pat Fitzpatrick has done all the hard work with this tongue-in-cheek gift guide for every budget, so you can tick everyone off your list and get down to enjoying yourself for the festive season.Gift stressbuster: We sort out who gets what and why

It’s not what you have that makes you happy, it’s what you do. And what better time to be proactive than during the season of goodwill, says Margaret Jennings.Joy to the world: Strategies to increase your happiness during the season of goodwill

More From The Irish Examiner