Pound pares losses after May’s general elections announcement

Pound pares losses after May’s general elections announcement

The British pound pared its earlier losses against the U.S. dollar after U.K. Prime Minister Theresa May announced general elections on June 8.

“I have just chaired a meeting of the Cabinet, where we agreed that the Government should call a general election, to be held on June 8,” May said in a statement in Downing Street.

“I want to explain the reasons for that decision, what will happen next and the choice facing the British people when you come to vote in this election,” she explained.

People’s choice at the elections will determine the shape of the Brexit, whether it would be hard or soft.

May said she needs elections because other parties opposed Brexit plans, and she would not tolerate opposing parties to jeopardize Brexit negotiations.

As of 10:40 GMT, the pound pared its earlier losses versus the U.S. dollar, where it traded at 1.2620 after falling to a bottom of 1.2513.

The pound fell on uncertainty ahead of May’s unscheduled statement that took place at 11:15 a.m. in London.

Against the euro, the pound strengthened to an eight-week high of 0.8430, recovering from the session’s low of 0.8510.

The euro resumed its retreat amid fears of “Frexit” with French general elections just one week ahead.

The dollar index is set for its fifth daily drop over the last six sessions, trading at 100.04, compared to the session’s open at 100.25.

Ahmed Mamdouh

Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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