The pound fell against all of its major competitors as the aftermath of the June 8th election continues to roil British politics with the official start of Brexit negotiations just a week away.
Sterling dropped as low as 1.2637 in London trading on Monday just five points above its immediate post-election low. Friday's 1.6 percent loss against the dollar was its largest single day collapse since October. The pound had recovered slightly to 1.2653 in late New York trading.
Prime Minister Theresa May had called the election in April in the expectation of augmenting the thin Conservative majority in Commons in the hope of providing a stronger position for negotiations with the European Union.
In a stunning and expected defeat the Conservative party lost its outright majority of 331 and though at 318 seats it is still the largest party in the 650 seat House of Commons it cannot govern without forming a coalition. Prime Minister May announced her intention to form a government on Friday and her government is currently in talks with the Democratic Unionist Party of Northern Island whose 10 seats will give the Conservative a bare majority of 328.
The Sterling depreciated to 0.8866 versus the euro on Monday, just below Friday’s 0.8861 low. That is been the weakest the pound has been against the united currency since January 16th.
The yield on the 10-year gilt dropped to 0.967 percent on Monday, the weakest it has been since the first week of October. It had been at 1.033 before the election.
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