Pound Extends Fall After U.K. Election Result

The British pound continued to be weak against other major currencies in the pre-European session on Friday, following the U.K. election results, with no clear winner emerging from Thursday’s parliamentary election.

An updated BBC forecast predicted the British Prime Minister Theresa May’s Conservatives would win 316 of the 650 seats, resulting in a hung parliament.

Labour leader Jeremy Corbyn urged Mrs May to resign, but she said the country needs a period of stability at this time more than anything else.

Traders also fears that Brexit negotiations could be delayed.

Meanwhile, the currency showed muted reaction after the U.K. economic data.

Data from the Office for National Statistics showed that U.K. industrial output climbed moderately by 0.2 percent month-on-month in April, but it reversed March’s 0.5 percent decrease. Output was forecast to climb at a faster pace of 0.7 percent.

Similarly, manufacturing output gained 0.2 percent following a 0.6 percent drop in the previous month. But the pace of growth was weaker than the expected 0.8 percent.

On a yearly basis, industrial production declined for the first time in six months in April. Production fell 0.8 percent, in contrast to a 1.4 percent rise in March. Economists had forecast a 0.3 percent drop.

In manufacturing, output remained flat in April after expanding 2.2 percent in the previous month, while it was forecast to grow 0.7 percent.

Another report from ONS showed that construction output slid 1.6 percent month-on-month, driven by falls in both repair and maintenance, and all new work.

Also, U.K. visible trade deficit declined to GBP 10.38 billion from GBP 12.04 billion in March. The expected level of shortfall was GBP 12 billion.

The deficit with EU countries totaled GBP 8.31 billion and that with non-EU countries was GBP 2.06 billion.

In the Asian session today, the pound had fallen against its major rivals.

In the pre-European trading, the pound fell to nearly a 2-month low of 1.2636 against the U.S….

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