Pound Plunges Ahead of U.K. Election

• Pound Plunges Ahead of U.K. Election

The British pound plunged against the greenback as the uncertainty surrounding the June 8 election reached a new level.

According to a YouGov Plc study released on Wednesday Theresa May’s Conservative Party may fall short of a majority, an outcome that wasn’t priced in few weeks ago.

Plunging the pound sterling to $1.2876 as of 9:47 a.m. in London.

“Sterling is likely to remain volatile over the next week as we approach the election on 8 June,” wrote Craig Erlam, a senior market analyst at OANDA Europe Ltd. “Recent polls have shown that Theresa May’s lead has narrowed, in some cases quite considerably, which has sent the pound into a bit of a tailspin at times.” Although polls can be inconsistent, Erlam said, the “the trend does appear to be one of May’s lead shortening.”

The decline was however contained by U.K. data that showed the manufacturing activity maintained momentum in May.

The pound plunged 0.1 percent to $1.2876 as of 9:47 a.m. in London.