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.
Traditionally elections in the UK have had an impact on the value and strength of the GBP. However, since the Labour Party’s victory in 1997 they have become a market-friendly party which gave the Bank of England independent control over interest rates. As there must be an election by June the 3rd there is a period of uncertainty coming for traders of the GBP. The impending UK Election Could Weaken Stirling For Forex Traders, with the possibility of a deficit as large as 10%.
For 13 years forex traders at trading firms such as HY Markets have largely ignored the political shifts due to the Bank of England having control of interest rates but in the run up to this year’s general election the stakes are once again high for foreign exchange traders and investors due to a number of factors.
