Hung Parliament Has Caused The Pound To Plummet
Traders at eToro and many of the world’s other leading online Forex brokers saw the pound suffer in the wake of the inconclusive 2010 general election results. The hung parliament has caused the pound to plummet as investors and market analysts fear the worst for the Great British Pound and until a government is decided the GBP may continue to suffer.
The pound fell against both the US dollar and the struggling Euro, with the GPB falling to $1.4683 against the USD, a drop of 2% and the British currency falling almost 1.5% against the Euro, dropping as low as €1.1597. The devaluation of the pound at Forex brokers such as eToro was largely expected against the dollar but losing so much ground to the Euro was not anticipated.
The reason for the pound’s poor performance is partly caused by concerns that a weak government might be unable to reduce the UK’s high budget deficit quickly. This could also lead to the loss of Britain’s triple A credit rating, which would further hamper the GBP’s progress.
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