Sterling Under Pressure as Exit Polls Predict a Hung Parilament

‘Super Thursday’ had actually been a bit of a disappointment for a lot of traders who were hoping for huge moves across the currencies. The ECB and Comey testimony’s provided some good volatility but nothing out of expectation, however, in the last couple of hours we’ve seen the cable plummet 250 pips on exit polls that show the UK is heading for a hung parliament.

First up on Super Thursday was the ECB and those traders hoping for something a bit more hawkish were once again disappointed as the central bank held and lowered it’s inflation forecast, Eur’s dropped off from just beneath the 1.1285 level to sub 1.1200 since.

Into the US session and we got to hear from former FBI Director Comey in his testimony to Congress and although the situation in Washington seems far from ideal, he confirmed that President Trump was not under investigation and had no case for obstruction. This has led to a bit of a relief rally for the ‘Trump Trade’ into the end of the session.

The dollar index has benefited from both outcomes and was trading back up near 97.00 at the end of the US session. The cable’s move has taken it even higher in the Asian session and it’s now approaching 97.40

So, looking ahead to today and all eyes in the Asian session will be firmly on the Cable and the sterling crosses as the results come in for the UK election with further downside anticipated if the exit polls are to be believed. The result should be known by 6.00 am London time and we’ll see the fall out from the result throughout the London session and into the weekend. We do have Manufacturing Production data out of the UK but that will be superseded by the election influence.

For the Cad traders out there, the Canadian employment data is due in the NY session which could move the Loonie about but in general we will see the markets move in line with yesterday and today’s major events and the market interpretation.

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