Britain is ‘Hung’
With the electoral votes in, a hung parliament is now set to be Britain’s future, for the short term at least. Liberal Democrats' leader Nick Clegg acknowledged they have had a ‘disappointing night’ and with Labour and the Conservatives both unable to win outright, recent predictions have indeed proved accurate.
Pound Sterling – UK Markets
The Pound has lost ground today against most major counterparts. As a hung parliament appeared to be on the brink of occurring the GBP/USD sank to a one year low at 1.45 and there is no guarantee that it will stop here. Furthermore, the strong GBP/EUR rates observed over the past couple of days were as we thought more to do with the weakness of the Euro rather than the strength of the Pound.
As was mentioned yesterday, today has made the picture a little clearer and we will undoubtedly get a better idea of the state of play as the day’s events unravel.
US Dollar – US Markets
A wild day on Wall Street saw the Nasdaq stock exchange cancel trades and give a ‘here we go again’ feeling that reminded us all of the darkest days of the financial crisis.
News surrounding the USD remains positive with the conjunction of increasing consumer confidence within the US and the rapid growing uncertainty surrounding the situations in Europe and Britain.
The USD appears to be the ‘safe haven currency’ so ask your broker if you wish to gain more advice on this.
Euro – European Markets
As suggested yesterday, the Greek parliament has voted for the tough austerity package to go ahead despite the tension that arose and caused the death of three bankers.
Tough cuts on wages and pensions in juxtaposition to rises in tax are thought to be necessary actions in order to avert a possible default on the loan given to Greece. Understandably, such actions remain unpopular within Greece.
The Euro continues to struggle amidst the crisis and although the single currency has clawed back some ground against the Pound, uncertainty surrounding the issues is still of grave concern.
Other Currencies – Highlights
Concerns over the ongoing crisis in Greece has caused concern within the Bank of Japan and the Reserve Bank of Australia. Their fears are that the problems may cause havoc on the credit markets similar to that of 2008. In response, Japan has placed 2 trillion yen into the markets. It is yet to be seen whether or not others will follow suit.