(photo credit: JPOST STAFF)
LONDON - Sterling saw its biggest daily fall since January before recovering some ground on Friday after an exit poll unexpectedly showed Prime Minister Theresa May falling short of an overall parliamentary majority in Britain's election.
The shock of a projection that raised questions about how Britain will advance with its plan to leave the European Union, and whether any party could form a stable government, sank the pound initially by almost 2 percent against both the dollar and euro.
But rises in the vote for May's Conservatives in a handful of early results, along with the prospect that an opposition Labour-led coalition might engineer a softer "Brexit," helped the currency recover half of those losses.
"We only have four seats in at the moment but as soon as returning officers are telling us that the Conservatives are losing but lessening their losses in Labour safe seats, sterling is getting a bid," said Jeremy Cook, chief economist at the international payments company, World First.
By 2307 GMT, sterling was 1.3 percent lower on the day at $1.2780, having fallen as low as $1.2705, and 87.59 pence per euro.