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Pound seeks floor after shedding 1.6% in Asia trade

After a sharp drop early on Friday in Asia, pound’s prospects are little improved as the prospect of Tories falling short of a majority in parliament looks increasingly likely.

The British currency was still suffering in afternoon Asia trading, down 1.6 per cent against the dollar at $1.2752 as it looked increasingly likely Theresa May’s Conservatives would fall short of a majority in parliament.

Sterling was down 1.5 per cent against the euro at £0.878 and Japan’s yen at ¥142.45, while it was 1.4 per cent lower against the Australian dollar at A$1.6924.

Sterling had also lost 1.7 per cent against the South African rand and South Korean won, was down 1.6 per cent against the Mexican peso. and Brazilian real and had shed 1.5 per cent against the Swiss franc and Canadian dollar.

The losses came as the ruling Conservatives appeared on course to lose their majority, potentially leading to the first hung parliament since 2010. Sterling had surged on the decision to hold the general election in April, amid hopes then that the Tories would boost their majority.

The dollar was making (albeit less spectacular) gains against its other peers as well, with the dollar index tracking the greenback against a basket of global currencies up 0.4 per cent at 97.271.

Japan’s yen was down 0.2 per cent at ¥110.29 per dollar, while the Australian dollar shed the same amount to $0.7533. The euro was off 0.1 per cent against the dollar at $1.1202.