In light of last nights unexpected poll results there is increased political uncertainty in the UK. With Brexit negotiations only around the corner GBP has taken a hit and is expected to fall even further.
It comes with no surprise that sterling opens this morning on the back foot as European markets wake up to the unexpected reality that the Conservatives have lost their overall majority. The currency had already fallen by around 2% after the release of the exit poll last night.
Sterling’s weaker tone is reflected in EUR/GBP above 88p. Meanwhile, the GBP/USD pair is changing hands just below the $1.27 level. However, the fallout from the election has so far been largely confined to sterling.
In the day ahead, the outcome of the UK election will continue to command the market spotlight. Therefore, sterling remains sensitive to political developments heading into the weekend.
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