FxWirePro: Pound suffers as YouGov predicts ‘hung parliament’

The recovery staged by pound last night ended abruptly and with a sharp fall against its major trading counterparts after the well-recognized pollster, YouGov predicted an increased possibility of a Hung Parliament. The financial markets had already pulled down the pound from its recent high around 1.305 against the dollar as recent polls suggested that a lead for Theresa May’s Conservative Party is diminishing fast, especially after this month’s deadly Manchester attack.

The latest YouGov model predicts that the Conservative Party under the leadership of Theresa May would lose 20 seats while the opposition Labour Party would win 30 additional seats resulting in a hung parliament with no majority. That would certainly add immensely to the uncertainties surrounding the election and the Brexit negotiations.

We at FxWirePro has been bullish on the pound in the short term. The pound reached two of our forecasted targets around 1.29 and 1.302 but is yet to reach the other two targets around 1.32 and 1.35. While we acknowledge that polls can certainly add to volatilities and a further decline in the pound, we do not see a need to change our short-term outlook based on polls which have proven to be wrong ion the past.