Tumbling pound to hurt our exports to the UK
The pound tumbled last night in a dramatic echo of last year's Brexit vote after an exit poll showing the UK facing a hung parliament.
The exit poll threw massive doubts on the logistics and potential tone of Brexit talks - including who will represent the UK in the crucial negotiations with the EU's lead negotiator Michel Barnier.
Sterling dropped 1.6pc in minutes to $1.2752 in New York after the 10pm exit poll.
Against the euro, the pound fell to almost 88 pence, which will hammer Irish exporters into the UK if it is sustained. "A hung parliament is the worst outcome from a markets perspective as it creates another layer of uncertainty ahead of the Brexit negotiations and chips away at what is already a short timeline to secure a deal for Britain," said Craig Erlam, London-based senior market analyst at OANDA Corp.
Earlier yesterday, the pound rose to a near a two-week high as Britons went to the polls, with the markets increasingly convinced Prime Minister Theresa May would retain and possibly increase her parliamentary majority following the UK general election.
As polls closed, investors were betting on continued Conservative government, seen by many in the markets as better for the pound.
The pound shot up seven weeks ago, in the immediate wake of Mrs May's decision to call a snap election.
Polls then had pointed to a landslide win for her, which analysts said would strengthen her hand to negotiate a Brexit deal with the EU without being pressured by the Eurosceptic wing of her own party.