Black Friday Sale! Save huge on InvestingProGet up to 60% off

Sterling sinks as UK heads towards hung parliament

Published 05/07/2010, 02:07 AM
Updated 05/07/2010, 02:12 AM
EUR/GBP
-

* Sterling hits 1-yr low vs dlr of $1.4596, slumps vs euro

* UK vote results point to hung parliament

* Euro climbs 1 pct on day vs sterling

By Naomi Tajitsu

LONDON, May 7 (Reuters) - Sterling sank to a one-year low against the dollar and fell sharply against the euro on Friday after incoming results of a UK general election suggested the country was heading towards a hung parliament.

The pound fell as low as $1.4596, its weakest since late April 2009, as ongoing vote tallies showed the opposition Conservatives were on course to become the largest party in parliament but lacked a clear majority. [ID:nLDE64600H]

Analysts said the stalemate was chilling sentiment for the pound, driving it down as London trade got underway.

"You've seen a significant swing towards the Conservative party but at this stage the polls, particularly the exit polls, are still pointing to a hung parliament," said David Forrester, vice president of global FX strategy at Barclays Capital in Singapore.

"The clearer the result, the better for the currency."

By 0601 GMT, sterling traded 0.5 percent lower on the day at $1.4692.

The euro rose roughly 1 percent on the day to 86.75 pence, before pulling back to 86.45 pence.

With a majority of the votes counted, neither a combination of the ruling Labour party and the Liberal Democrats nor one of the Conservatives and the Ulster Unionists looked to be able make up a majority, which may lead to political stalemate.

"It's as bad as it gets," said a London-based trader.

"Labour/Liberal Democrats cannot get a majority, Tory/Ulster Union cannot get majority, Tory/LibDem won't deal with each other." (Additional reporting by Tokyo Forex Team, Editing by Kim Coghill)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.