Cart: $0.00 - (0 items )

Pound suffers in Asia trade amid UK election uncertainty

The pound is hugging its lowest level in a month on Friday after the UK’s general election looks set for a shock hung parliament.

The pound suffered in Asia’s morning trade, down 1.4 per cent against the dollar at $1.2775, regaining some of its footing having fallen as much as 2 per cent earlier in the morning.

Sterling was down 1.3 per cent against the euro at £0.87704, Japan’s yen at ¥140.671 and the Australian dollar at A$1.6942.

Investors have been selling the UK currency as results trickle in from the general election which only a month ago had predicted a comfortable victory for the ruling Conservative party. The Tories are still on course to be the largest party in parliament but could fall short of an overall majority.

That will throw into doubt Britain’s EU exit plan. Prime minister May had campaigned for a ‘hard’ Brexit, taking the UK out of the single market and customs union.

“The result thus far does lead to the possibility of a sea change in the direction of Brexit negotiations – perhaps is the argument the market may fall on”, said Jordan Rochester at Nomura.

The pound also lost 1.6 per cent against the South African rand, South Korean won and Mexican peso. It was off 1.5 per cent against the Brazilian real and Canadian dollar, and down 1.3 per cent against the Swiss franc.

The dollar made gains against a number of its peers, though none so great as those against the pound. The dollar index tracking the greenback against a basket of global currencies was up 0.4 per cent at 97.278.

Japan’s yen was down 0.2 per cent at ¥110.17 per dollar, while the euro shed the same amount to $1.1198. The Australian dollar was off 0.1 per cent against its US counterpart at $0.754.

Chart via Bloomberg