Pound sinks over 1% against Singapore dollar after UK exit poll shows hung Parliament

The pound takes a tumble as British Prime Minister Theresa May's Conservative Party loses its parliamentary majority, throwing the country's politics into turmoil and potentially disrupting Brexit negotiations.
The pound dived after an exit poll showed Britain’s incumbent Conservative Party had unexpectedly lost its majority in Thursday’s election.
The pound dived after an exit poll showed Britain’s incumbent Conservative Party had unexpectedly lost its majority in Thursday’s election.PHOTO: AFP

SINGAPORE - The British pound fell sharply against the Singapore dollar and major currencies as an exit poll indicated British Prime Minister Theresa May's Conservative Party will fall short of a majority in Parliament.

The pound was down 1.4 per cent to S$1.7641 as of 11:20am on Friday (June 9) from its close of S$1.7892 on Thursday, after earlier falling to a session low of S$1.7552. This is a rough two-month low since it closed at S$1.7511 on April 17, according to Bloomberg data.

The British currency dropped 1.6 per cent to US$1.2748 as of 6:53am in Tokyo, the most since October, having fallen as low as US$1.2705 earlier. The pound also fell 1.6 per cent to 87.90 pence per euro.

Analysts warn that a so-called hung Parliament is the worst outcome from a markets perspective as it would add more uncertainty ahead of Brexit negotiations, with May's own political future also at risk.

"It's going to be close, and results will come out through the night, but this is going to leave Theresa May struggling to keep control of the Brexit process," Societe Generale analyst Kit Juckes told Agence France-Presse news agency.

May called the snap election three years early, expecting to cruise to an easy victory that would win her a mandate to see Britain through the long and difficult negotiations to leave the European Union.