Currency exchange markets respond to election

The currency exchange markets have responded to prime minister Gordon Brown's notice that a general election will be held in a month's time.

Mr Brown's formal announcement this morning (April 6th) saw sterling make significant losses on the markets.

It is thought that renewed angst over the possibility of a hung parliament result is to blame for the pound's fall.

Audrey Childe-Freeman, currency strategist at Brown Brothers Harriman, told Reuters: "Politics are taking centre stage in the UK. The ICM poll has highlighted political uncertainty which is weighing on sterling today."

The currency began trading at $1.53 at 09:00 GMT this morning.

This had fallen rapidly to around $1.51 at 11:30 GMT following the prime minister's announcement.

A decline against the euro was also seen as the British currency fell from €1.13 at 09:00 GMT to €1.29 at 11:30 GMT.

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Posted by Chris Smith