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Pound Sterling Stable after Jarring U.K. Elections

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Published on : Jun 12, 2017

After being at its extreme low since last week’s shocking election revelations, the British pound has finally gained stability in the Asian markets. It closed at US$1.2743 on Friday and traded at US$1.2740 on Monday morning. According to business and economic experts, there are chances that the currency might witness falls in the days ahead with the probability of a minority Conservative government. The stability of the pound sterling started coming into after Theresa May confirmed that she will lead a minority government, expectedly backed up by an alliance, likely to be informal, with the Northern Irish Democratic Unionist Party and would pay a visit to the Queen and pursue the formation of a new government.

Impact on Brexit

It has been reported that negotiation are due to begin the coming week with Brussels regarding Brexit and it is anticipated to have a noteworthy impact on the both the economies of the EU and the U.K. Mrs. Theresa May has been instantly pushing for the hard Brexit type, where the United Kingdom leaves the customs union and the EU single market, in the place of a softer Brexit, which would allow the United Kingdom to maintain the benefits of the associations. Experts opine that the diminished mandate scenario of May’s Brexit type and prolonged uncertainty regarding it are expected to have a deeper correction on the pound sterling, as per the scenario turns out to be

Further Probabilities

Experts further say that there are certain cooler heads at play in this scenario, thus being vary in terms of May’s choice put worth, considering the only option that the United Kingdom is left with is to accept a European Economic Area styled agreement, which is more favorable for the market. The markets are thus expected to struggle in the whirlpool of short-term probabilities, inharmonious with long term possibilities.