In a surprising turn of events, the UK’s general election has officially ended with a Hung Parliament.
The least expected outcome of the latest British political vote was given very limited airtime leading up to the vote, with polls largely expecting the Conservative parliamentary majority to be increased.
Subsequently, when 10pm exit polls forecasted that the Tories would lose their parliamentary majority, Sterling fell sharply – falling 1.8% against the dollar to $1.272 and 1.7% against the Euro to €1.133.
This morning, the exit polls have been confirmed. Major UK news outlets have officially called the election result as a Hung Parliament. The Conservative Party have not been able to win the 326 seats required to form a majority government and will pursue the formation of a coalition government. The Labour Party, meanwhile, made significant gains against the Tories, which raises questions as to whether the party’s soft Brexit position should be pursued by the UK when negotiations with the EU begin.
Having campaigned on a hard Brexit mandate spearheaded by Prime Minister Theresa May, the Conservative Party may now have to consider taking a step back from its staunchly anti-EU rhetoric, while Mrs. May’s own position as Prime Minister will be addressed this morning. Will she stay or will she go?
Shortly before the market open in London, the Pound traded just shy of 2017 lows of €1.165 against the Euro, while Cable traded below $1.265 for the first time since April. However, both currency pairings are off their worst levels as investors await the outcome of political manoeuvring by the main parties. Will the recovery continue throughout the morning or could we see a fresh uncertainty-induced sell off?
Either way, Accendo FX can help you save thousands on currency exchange during this unusual period for Sterling. Currently, your FX transactions may be exposed to increased market fluctuations, meaning that any foreign exchange price changes will make a tangible difference to your profits and costs. By calling your personal account manager or logging into our web-based payment platform, you can resolve this issue within minutes. Find how to save thousands in our comprehensive report here.
Similarly, Accendo FX can also help you hedge yourself against further currency fluctuations.
Our team will not only help you to secure forward contracts, which can help alleviate some of the pressures of dealing with FX markets, but will also provide you with timely information regarding political and economic events in the coming weeks which may influence the currency pairings that affect you.
For example, when undertaking a large transaction, by booking a chosen percentage of the transaction cost using a forward and then leaving the rest to either a series of spot trades or even further forward trades, should the price move in your favour, it effectively raises your average price.
Over the page, we analyse the reaction of Sterling’s two major currency pairings. Where to next?