Pound Falls After Exit Poll Predicts Hung Parliament
The pound instantly sank 1.4 percent to $1.2773 following a General Election exit poll which suggested that the Conservatives had failed to achieve an overall majority.
Against the euro, the pound also plummeted more than one percent to 1.13 euros.
Although commentators have pointed out that the value of the pound has fallen to the same level it was on April 18 before Prime Minister Theresa May called the election.
The exit polls usually reveal which party will go on to win the General Election. They are conducted outside polling stations and take a random sample of people who have voted in the election.
This means the exit poll is much more reliable than the majority of polls that ask voters who they plan to vote for on election day in advance.
The exit poll suggested the Conservatives would get 314 seats and the Labour Party would get 266.
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The Scottish National Party had 34 seats and there was 14 for the Liberal Democrats.
Pound drops immediately on the election exit poll. Market was betting on Conservative majority. Got it wrong again? pic.twitter.com/8Y5eaPdtRf
- Joel Hills (@ITVJoel) June 8, 2017
Discussing the falling pound, Craig Erlam at trading company Oanda told the Telegraph: "Sterling has fallen off a cliff after the initial exit poll.
"A hung parliament is the worst outcome from a market's perspective as it creates another layer of uncertainty ahead of the Brexit negotiations and chips away at what is already a short timeline to secure a deal for Britain.
"GBPUSD fell more than two cents immediately after the exit poll and looks very vulnerable to further downside.
"Now we move onto the results in the coming hours to see whether the exit polls do in fact accurately represent the voting. We should get the first result very soon and should it confirm what we're seeing, it could be another very bad night for GBP.
"Sunderland South is usually the first constituency to declare the official result. From around 11pm there should then be a steady trickle of results. The main wave of results is expected to start at about 3am, with the overall picture clear by about 5am."
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