All eyes are on the British Pound, and there has already been a shock in the early hours of trading on Friday that led to the Pound taking a dive all the way from 1.2950 to below 1.27 following increasing concerns that the UK is heading for a hung parliament.

The Pound is looking under severe pressure with polls indicating that the Conservatives will lose their parliament majority, which looks like another example of traders being on the wrong side of the trade after heavily stacking their cards in favour of a landslide victory for Theresa May when pricing in the UK election.

From a market perspective, a hung parliament is seen as one of the worst possible outcomes to this election because it just injects further uncertainty into the United Kingdom as it heads into Brexit negotiations with the European Union. The whole reason for the unexpected announcement of a snap election from Theresa May was to gain a more dominant hand when representing the UK in negotiations, but this outcome would suggest it has backfired and ultimately will result in the door being opened even wider when it comes to the UK entering further political uncertainty.

- advertisement -

If the momentum of the votes begins to shift in favour of what the preliminary polls have suggested will be a hung parliament, the Pound will be at risk to retracing all of its gains that has made since Theresa May unexpectedly called the election. This ultimately means that the Pound could drift to 1.25 within the next few hours if market uncertainty heats up.

Previous articleCrude Oil Plumbing Depths As 3-Drive Pattern Completes
Next articleBritish Pound in Free Fall as May’s Election Gamble Backfires
The FXTM brand provides international brokerage services and gives access to the global currency markets, offering trading in forex, precious metals, Share CFDs, ETF CFDs and CFDs on Commodity Futures. Trading is available via the MT4 and MT5 platforms with spreads starting from just 1.3 on Standard trading accounts and from 0.1 on ECN trading accounts. Bespoke trading support and services are provided based on each client's needs and ambitions - from novices, to experienced traders and institutional investors. ForexTime Limited is regulated by the Cyprus Securities and Exchange Commission (CySEC), with license number 185/12, licensed by South Africa's FSB with FSP number 46614, and registered with the UK FCA under reference number 600475. FT Global Limited is regulated by the International Financial Services Commission (IFSC) with license numbers IFSC/60/345/TS and IFSC/60/345/APM.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.