The general election has produced no overall winner. The Conservative party’s gamble has backfired. They are still the biggest party, however they were hoping to gain more seats in Parliament and strengthen their position for Brexit negotiations but have actually lost 12 seats (at the time of writing). Labour have done better than expected gaining 29 seats.
Exit polls called it
At 10:00pm last night the first exit poll results were announced and they indicated no majority and a hung Parliament. On this news the Pound weakened, with rates for buying Euros and US Dollars dropping by two cents.
Volatility the norm
The rates seem to have stabilised with GBP/EUR around the 1.13 mark and GBP/USD at 1.27. However, with political uncertainty being such a powerful driver for exchange rates there may be more to come.
With the need for a coalition government GBP exchange rates could remain volatile with sharp movement up and down a strong possibility on announcements. Theresa May has said she has no intention of stepping down, but there is likely to be lots of big news over the next few days as rumours circulate of coalition details.
As the day unfolds and with the result still to be finalised it appears Sterling exchange rates will continue to react to announcements during the day, this is also likely to drag into next week.