WisdomTree Europe: No sign of "strong and stable" pound as hung parliament confirmed
Following the shock election result, Viktor Nossek, director of research at WisdomTree in Europe, comments on what effect the idea of a hung parliament can have on the markets.
“This is a real shock for markets which had, like the polls suggested, expected the Conservatives to increase their majority.
“There will be no notion of strong and stable in currency markets after this vote. The pound has tumbled overnight, and this could be just the start, with volatility likely to remain elevated. Indeed, as the ramifications of this vote become clearer, the falls against the US dollar and other currencies could become more pronounced.
“Looking across markets in general, uncertainty will reign as parties try to form a government, so expect an increase in volatility in the near term and a focus on companies which are global in nature and therefore protected somewhat from domestic events in the U.K.
“The vote also kills off the notion of hard Brexit, and means months of fractured negotiations within Parliament over the final terms the UK pushes for with Europe.”