Sterling sinks as UK heads towards hung parliament

* Sterling hits 1-yr low vs dlr of $1.4596, slumps vs euro

* UK vote results point to hung parliament

* Euro climbs 1 pct on day vs sterling

By Naomi Tajitsu

LONDON, May 7 (BestGrowthStock) – Sterling sank to a one-year low
against the dollar and fell sharply against the euro on Friday
after incoming results of a UK general election suggested the
country was heading towards a hung parliament.

The pound fell as low as $1.4596, its weakest since late
April 2009, as ongoing vote tallies showed the opposition
Conservatives were on course to become the largest party in
parliament but lacked a clear majority. [ID:nLDE64600H]

Analysts said the stalemate was chilling sentiment for the
pound, driving it down as London trade got underway.

“You’ve seen a significant swing towards the Conservative
party but at this stage the polls, particularly the exit polls,
are still pointing to a hung parliament,” said David Forrester,
vice president of global FX strategy at Barclays Capital in
Singapore.

“The clearer the result, the better for the currency.”

By 0601 GMT, sterling (GBP=D4: ) traded 0.5 percent lower on
the day at $1.4692.

The euro (EURGBP=D4: ) rose roughly 1 percent on the day to
86.75 pence, before pulling back to 86.45 pence.

With a majority of the votes counted, neither a combination
of the ruling Labour party and the Liberal Democrats nor one of
the Conservatives and the Ulster Unionists looked to be able
make up a majority, which may lead to political stalemate.

“It’s as bad as it gets,” said a London-based trader.

“Labour/Liberal Democrats cannot get a majority,
Tory/Ulster Union cannot get majority, Tory/LibDem won’t deal
with each other.”

Investment Basics

(Additional reporting by Tokyo Forex Team, Editing by Kim
Coghill)

Sterling sinks as UK heads towards hung parliament