Sterling has weakened to fresh lows against both the euro and the dollar following the results of Thursday’s UK general election, in which Theresa May’s plan to win a stronger overall majority backfired badly.

As soon as the exit poll was announced at 10pm last night, which showed the Conservatives were on course to perform much poorer than anticipated in this election and fail to win an overall majority in the House of Commons, currency markets reacted almost immediately with a sharp dive in the value of the pound by about 2p against both the US dollar and the euro.

Sterling continued to weaken throughout the night and is currently trading at £0.88 against the euro, which is the weakest it has been relative to the European currency since early November.

The pound has fared even worse against the US dollar overnight and currently buys you $1.27, which is 3c less than what it got you yesterday evening.

While this latest decline in the value of sterling is nothing compared to the dramatic swings seen following the Brexit vote almost a year ago, this election result will only serve to further reinforce the underlying weakness in the UK currency, which is not good news for Irish exporters.

A hung parliament at Westminster is sure to cause even more uncertainty for the future direction of the UK, which will not be welcomed by financial markets and traders. The likelihood is that we could be looking at sterling weakening even further by the end of next week to move into the £0.90 region against the euro. A range of £0.91 to £0.92 is being touted by currency traders in London already.