We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
More View more
Real Time News
  • Last week was more of the same, a narrowing range following the UK general election fireworks; GBP/USD has a couple of clear signposts to keep an eye on. Get your $GBPUSD technical analysis from @PaulRobinsonFX here: https://t.co/3pJfj0w2AX https://t.co/Cm6zhnBSGR
  • The $AUD is pressuring four-month trend support against its US counterpart as sellers fight to reassert the dominant, long-term downtrend. Get your market update from @IlyaSpivak here: https://t.co/Bup64Arva9 https://t.co/OLpavqPOVA
  • RT @globaltimesnews: A total of 1,052 cases of #coronavirus have been reported as of Jan 25 in #Hubei Province, with 129 in critical condit…
  • RT @FactSet: $SPX is reporting revenue growth of 2.9% for Q4, led by the Health Care (11%), Utilities (9%), and Communication Services (9%)…
  • The AUD has been hit by the risk-appetite pullback occasioned by the spread of Wuhan-strain coronavirus. This week may see domestic focus return, if headlines allow, with key inflation data due. Get your $AUDUSD market update from @DavidCottleFX here: https://t.co/UIpwno0pSq https://t.co/kib4d1mA0q
  • RT @anilvohra69: USD inverted (red) is correlated to Excess Reserves (blue) and Reserve Balances (green). 1/2 https://t.co/bbO1pPWY4F
  • RT @FactSet: $SPX is reporting a decline in earnings of -1.9% for Q4, led by the Energy (-42%), Consumer Discretionary (-14%), and Material…
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/6iMyDFqnqe
  • Knowing how to accurately value a #stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/2mjzvYvgSn
  • Previewing the Texas Rangers new home! https://t.co/WITZGSQPlc
U.K. Faced with First Hung Parliament Since 1974, GBP/USD Extends Four Day Decline

U.K. Faced with First Hung Parliament Since 1974, GBP/USD Extends Four Day Decline

2010-05-07 19:35:00
Michael Wright, Currency Analyst

What is a hung parliament?
Specifically, a “hung parliament” is one in which no single party has an overall majority (no more than half of MPs in the House of Commons). As Cameron puts it, “a hung parliament is instability, uncertainty, potentially higher interest rates, potentially Britain losing its credit rating.”

What this means for the U.K.
Senior Labour officials have said that under the rules of Britain’s constitution, the sitting prime minister in a hung parliament makes the first attempt at forming a ruling partnership. Meanwhile, Moody’s Investor Services reaffirmed its AAA credit rating for Britain and said that the hung parliament is not a “direct threat” to the stable outlook held by the group as they expect to see a “fiscal adjustment that is no looser nor slower than was outlined by all three political parties during their respective pre-election campaigns.” Furthermore, the rating agency stated that “the absence of a one-party majority does not necessarily weaken the government ability nor its inclination to stabilize public debt metrics in the coming years.”

The last hung parliament was February 1974, and history thus far is repeating itself as the U.K. is once again faced with a huge public debt, now nearing 12%. Worrisome, the total debt is forecasted to reach 88%, exceeding the European Union’s average. Ahead of the election, European Commissioner Olli stated that reducing the deficit was “by far the first and foremost challenge, no matter who wins.”   Making it even more difficult, nobody won. Unlike 1974, Britains do not have the time to call a second election later this year. Market’s might decide they are out of time and lead Europe’s second largest economy down the Greek ally, pushing up borrowing costs and driving down the price of gilts. This scenario can materialize going forward if a compromise is not made immediately. Adding further pressure onto the region, 1 year credit default swaps (insurance against default) rose to the highest level since in two months, and is ranked 8th amongst the Western European countries, with Greece leading the way at 1,277.0.


On the other hand, a hung parliament may have the adverse effect and send the message to politicians that indeed Britains are fed up with the current electorate system. With the U.K.’s debt crisis now in the spotlight subsequent to speculation of Greek contagion fears, the timing couldn’t be any worse for the country to experiment with a government that has happened only five times in the past century. Nevertheless, after extending a four day decline, the British pound may remain under pressure as market participants may look towards the BOE’s rate decision next week on May 10th as traders fret about future fiscal policy.

Written by Michael Wright
Questions? Email me at instructor@dailyfx.com


DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.