LONDON — The biggest players in the global foreign exchange markets are seeing their influence and control over the sector dwindle,  the latest figures from financial publisher Euromoney show.

Euromoney released its annual ranking of traders by volume — the most widely watched such ranking — on Wednesday. It showed that the top five players saw their combined overall share of the market drop from 45% in 2016 to 41% in 2017.

On an individual basis, American banking giant Citi retained its place at the top of the ranking, controlling 10.74% of the overall market, a fall from nearly 13% in the previous year.

JP Morgan was the only other bank with more than a 10% share, controlling 10.34% of the market, compared to 8.79% in 2016.

Other banks in the top five were Swiss lender UBS, Bank of America Merrill Lynch, and Deutsche Bank. That remained the same as 2016's ranking, with the exception of Deutsche Bank and BAML switching places. Deutsche Bank accounted for 5.68% in 2017, compared to 7.88% in 2016, the report showed.

Rounding out the top 10 were HSBC, Barclays, Goldman Sachs, Standard Chartered, and BNP Paribas, with Standard Chartered jumping from 15th in 2016 to 9th this year.

Foreign exchange accounts for roughly $5 trillion of trades globally every day, and has traditionally been dominated by the world's biggest banks, but in the post-financial crisis era, that dominance has been steadily ebbing away.

In 2009, for instance, the top five forex players controlled more than 61% of the market, compared to 41% eight years later. When it comes to the top 10, figures have shifted from roughly 80% in 2009 to 63% now.

The release of Euromoney's survey comes on the same day that the new FX Global Code of Conduct, designed to provide behavioural guidelines to forex market participants, was launched by the Bank for International Settlements.

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LONDON — With the general election now less than two weeks away, currency traders are getting jumpy, especially after two polls overnight on Friday showed a significant narrowing of the Conservative Party's prospective share of the vote.

Opinions on where the pound will head in the coming months differ wildly among forecasters, with a range of between 1.20 on the dollar to $1.45 from major forecasters over the course of the next 18 months.

Sterling has rallied since the election was called, passing above 1.30 on the dollar for the first time since September 2016 in recent weeks. That has been based largely on the assumption that May's Conservative Party will win an increased majority at June's election, paving the way for her to take a more conciliatory stance on Brexit, and move away from the sort of Brexit favoured by hardline Conservative MPs, who currently have a disproportionate influence on policy thanks to the party's slim majority.

Regardless of the overnight polls — which have pushed the pound down close to 0.5% — most forecasters are still expecting a Conservative majority come the morning of June 9, so focus is on the so-called "second stage" of the election.

That's according to ING FX Strategist Viraj Patel, who writes in a note circulated on Thursday that "the emphasis is on the second stage; both a cabinet reshuffle (likely within a few days of the election result) and the UK's stance on a Brexit transition deal will give GBP markets greater directional steer."

"The bottom line is that GBP risks from the General Election look asymmetrically skewed to the downside – there is now more to lose than gain."

To help steer through those issues, Patel and his colleagues at the Dutch lender have compiled a chart exploring what potential reshuffles and the negotiation of a transition deal could mean for sterling. Check it out below:

(Note that Patel's analysis was compiled prior to the most recent polls, so does not reflect all of the swing to the Labour Party in those polls)

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LONDON — The pound is more than 1% lower on Friday after a poll showed the Conservative Party's lead in the general election narrowing substantially.

The poll, published by YouGov late on Thursday, showed the Labour Party increasing its projected vote share by five points to 38%, while the Conservatives saw theirs drop to 43%, a fall of one point.

While the party still has a solid lead, projections done alongside the poll show that if the results were repeated on June 8, Theresa May's majority in parliament would be reduced to just two seats.

Sterling has rallied since the election was called, passing above 1.30 on the dollar for the first time since September 2016 in recent weeks. That has been based largely on the assumption that May's Conservative Party will win an increased majority at June's election, paving the way for her to take a more conciliatory stance on Brexit, and move away from the sort of Brexit favoured by hardline Conservative MPs, who currently have a disproportionate influence on policy thanks to the party's slim majority.

However, if her majority were to decrease, it would threaten this view.

The poll has pushed currency investors to sell sterling on Friday, with the currency losing 1.14% and dropping below the $1.28 mark. Here's how it looks as of 16.05 p.m. BST (11.05 a.m. ET):

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LONDON — Developments in sterling would almost universally be negative in the short term should Jeremy Corbyn become prime minister, according to most analysts.

With just over one week until the general election, Theresa May's lead in the polls appears to have stabilised, albeit at a much lower level than just a few weeks ago.

At the start of the campaign, May's lead was as high as 21 points in some polls, but it has now narrowed to around 7 points on average.

Those numbers still suggest May will be prime minister after the election, with a Conservative majority in parliament, but the potential for a Labour government has become more realistic in recent weeks.

While it is highly unlikely that Jeremy Corbyn will end up in Number 10 come June 9, the prospect of Prime Minister Corbyn is not beyond the realms of possibility after the recent narrowing — with a coalition between Labour and the SNP mooted in recent days.

Investors have spent most of the campaign betting on an increased Tory majority with May at the helm of government as Britain negotiates Brexit, but Labour's recent poll surge has caused many to consider the prospect of a government led by Corbyn, and what that could mean for the markets, especially the pound, which has been incredibly vulnerable to political developments since the Brexit vote.

"Looking at how much we have moved since this election was called, it is pretty clear the response would be negative and if I had to put a figure on it, I would say a kneejerk sell-off of 5% or a bit more," Adam Cole, head of FX strategy at RBC Capital Markets told the Daily Telegraph on May 27.

Writing earlier in May, ING FX strategist Viraj Patel notes that even if Labour were to win, the likelihood of a majority for the party is tiny. Instead, they will enter a coalition with the SNP, and possibly the Lib Dems, which could have mixed consequences in the markets.

Here is Patel (emphasis ours):

"We think a Lab-Lib-SNP coalition risks having a Marmite effect on markets: either they’ll ‘love it or hate it’. On the one hand, a softer Brexit could be the goal of a Labour-led coalition government; but on the other hand, it raises political uncertainty – which has proven to be GBP’s Kryptonite over the past year. In the short-term, we would expect the uncertainty factor to prevail."

ING's commentary is accompanied with a forecast of a drop to around 1.25 on the dollar in the aftermath of Corbyn's ascension to the office of prime minister. That would mark a fall of around 3% from its current level of around $1.2860.

Jordan Rochester and his team at Nomura are mildly more optimistic, writing on May 24 (emphasis ours):

So once the knee-jerk reaction lower in GBP takes place, the expectation of tighter BoE policy would see an improvement in real yields and the fall in GBP to eventually be offset. GBP would also benefit from Labour’s stance on Brexit being somewhat “softer” than the Conservatives, especially if it forms a coalition with the SNP and Liberal Democrats.

A coalition government may encourage some to argue GBP should be lower owing to the uncertainty. But the removal of austerity (leading to higher real yields) and renewed arguments as to a “softer” Brexit are likely to inspire less GBP negativity as once thought.

JPMorgan's currency team takes a similar view, writing last week that a possible hung parliament — if the Conservatives fail to secure a majority — could end up as a positive for the pound.

"In the post-referendum world, all political developments need to be viewed through a Brexit prism and an argument can be made that a hung parliament which delivered or held out the prospect of a softer-Brexit coalition of the left-of-centre parties (Labour/Lib Dems/SNP) might actually be GBP positive," the bank writes.

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LONDON — Deutsche Bank has turned bearish on the pound once again, saying that any possible upside for the currency from next week's election has already been priced into the market.

Writing on Tuesday, Deutsche Bank strategists Alan Ruskin and George Saravelos used their latest FX Blueprint note to warn investors it is "time to get bearish on GBP again," after just over one and a half months of a positive outlook on the UK's currency.

"A market-friendly UK election outcome already appears priced and the risks are now skewed to a disappointment," the pair argue.

"Whatever the outcome, we believe a strong conservative majority is a necessary but not sufficient condition for a "smooth" Brexit. Initial talks look fraught with difficulty and the European stance is hardening."

Consequently, even if Theresa May and her Conservative Party win a large majority next Thursday, sterling's reaction is unlikely to be hugely positive. Once the election is out of the way, traders will turn back to impending Brexit talks, as well as the economic slowdown beginning thanks to the vote, and sterling could be in for more weakness.

Here is the pair once more:

"GBP positioning is much lighter, the evidence for a consumer-led slowdown continues to build, and the Bank of England is likely to stay firmly on hold through the remainder of the year. All this leaves inflows into the UK highly vulnerable to a rapid slowdown. We like selling GBP both against EUR and CHF."

Since the referendum, Deutsche Bank has been consistently one of the most bearish sterling forecasters, and as recently as February, Saravelos argued that the pound could continue to fall, dropping as low as 1.05 against the dollar. At the time, he cited concerns about a potential "cliff-edge Brexit" as a key reason for that forecast.

Deutsche surprised many in the market in April however by reversing its structurally bearish call on the pound after Theresa May called for a general election, something Saravelos said at the time was a "game changer." 

Since that call — when sterling was at roughly $1.27 against the dollar — the pound has passed above $1.30, before falling to its current level of around $1.2860 as polls showed a brief surge in support for the Labour Party.

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LONDON — The pound is down against the euro on Wednesday after a new poll suggested that next week's election could return a hung parliament.

Meanwhile the pound fell against the dollar in morning trading, but made gains in the afternoon after US President Donald Trump reportedly decided to pull out of the Paris Climate Agreement which sent the dollar lower against major currencies.

The Times reports that a constituency-by-constituency poll by YouGov suggests that the Conservatives could lose 20 seats in the general election, while Labour could gain 30.

The Tory party would fall 16 seats short of the 326 needed to control the House of Commons, leaving no one party with overall control of parliament.

The Times admits in its report that the YouGov poll "allows for a wide margin of error" and "suggests that the Tories could get as many as 345 seats on a good night, 15 more than at present." YouGov is also quoted in the piece saying that the forecast is "controversial."

Despite the caveats on the poll, the pound fell immediately against the dollar and euro when the Times' report was released late on Tuesday evening.

Sterling was still down against the euro in afternoon trading despite a late rally, but it gained nearly 0.4% against the dollar after a morning fall when Axios reported that Trump was set to withdraw from the Paris Climate Agreement.

Here's how the pound looks against the euro at 4.10 p.m. BST (11.10 a.m. ET):

And here's how sterling looks against the dollar:

Jameel Ahmad, vice president of market research at FXTM, says in an email late Wednesday morning: "These losses being seen in the pound can be strictly linked to the financial markets becoming anxious with a major election taking place just over one week away, and investors stacking their cards heavily in favour of Theresa May winning a one-horse race.

"Recent indications have suggested that the election is going to be a closer call than what was previously thought, and traders are now starting to shuffle their cards towards other potential outcomes."

Michael Hewson, chief market analyst at CMC Markets, said in an email early Wednesday morning: "While the pound has recovered some ground after its wobble at the end of last week, there is a slightly more cautious attitude as a result of those narrowing polls, with another survey showing that the prospect of a hung parliament has also increased, which has also acted as a bit of a weight around sterling’s recent progress."

Nomura's Jordan Rochester says in an email on Wednesday that a better-than-expected result for Labour could actually be good for the pound in the long-term.

"Once the dust has settled austerity would be removed and “softer Brexit” hopes would return after the dust has settled higher real yields may offset this and GBP eventually would be higher," Rochester writes.

But he adds: "It is important to note that this is the ‘end-game’ of a Labour win we are talking about. To get there, we would have to travel through territory that included hung parliament and coalition risks and expectations."

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LONDON — HSBC is bearish on the pound and believes the risks associated with a "hard" Brexit will see the currency weaken immediately after the general election on June 8 whatever the outcome.

Writing on Tuesday, HSBC strategists David Bloom and Daragh Maher forecast that the pound would reach parity with the euro and 1.20 against the dollar by the end of 2017.

They said that the currency "remains vulnerable to a potentially acrimonious negotiation process with the EU and the lingering possibility of a 'no deal' outcome."

The pair also pointed to a continued widening of the trade deficit and signs that the economy is losing traction — notably through lower consumer spending — as reasons that the pound will adjust downwards.

Heading towards euro parity?

"We believe this recent rally is most likely to have marked the 2017 high for GBP/USD at around 1.30," the pair argue.

"We continue to believe GBP/USD will weaken back to 1.20 and EUR-GBP will move to parity by the end of 2017 on the back of political, structural and cyclical pressures."

Prime Minister Theresa May is widely expected to win a majority in June, despite a shock poll released on Tuesday evening which projected that the election would force a hung parliament.

A Deutsche Bank note circulated to clients earlier this week was also bearish on the pound, saying that any possible upside for the currency from next week's election has already been priced into the market.

"A market-friendly UK election outcome already appears priced and the risks are now skewed to a disappointment," the note said.

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LONDON — The pound is rallying after briefly falling on Monday morning as investors reacted to the weekend terror attack in London Bridge and await the outcome of Thursday's general election.

Sterling slipped around 0.5% in overnight trading on Monday before rallying to around $1.29.

The currency has traded choppily in recent weeks as polls indicate a big narrowing in the race for Downing Street, with Labour closing in on the Tories to as little as 1% according to a Survation poll published on Sunday.

While the Conservatives still have a solid lead, the less predictable prospect of a Labour government negotiating Brexit has unsettled some investors.

The currency was up 0.12% at around $1.2902 on Monday morning. Here's how it looks at 11.58 a.m. BST (6.58 a.m. ET):

Here's how it looks against the euro:

A morning note from Konstantinos Anthis, an analyst at ADS securities, said: "A comfortable win for Theresa May in the UK election would ease pressure on the pound, but if the Labour party gains control of the Government this could impact the UK's approach to Brexit, which would weigh heavily on sterling.

"As we move closer to the election the pound is expected to trade in a choppy manner as investors will be reacting to last-minute exit polls with the current range of 1.2800 to 1.2900 capping any short-term price action."

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LONDON — The pound is stable in late afternoon trading on Tuesday as investors await the outcome of Thursday's general election.

The currency has traded choppily in recent weeks as polls indicate a significant narrowing in the race for Downing Street. A Survation poll published on Monday evening found Labour within just one point of the Conservatives.

While the Conservatives still have a solid lead, the less predictable prospect of a hung parliament or coalition government has unsettled some investors.

Investors still appear to be betting on a Conservative majority, with both the pound and the FTSE 100 proving resilient amid the narrowing polls.

The pound was down 0.06% to trade at $1.2895 in late afternoon trading. Here is how it looks at 16.52 p.m. (11.52 a.m. ET):

And here is how it looks against the euro:

Hussein Sayed, chief market strategist at FXTM, says in a morning note: "The pound managed to remain bid, despite the weaker than expected PMI data and conflicting poll outcomes. The latest polls indicate that the Labour party continues to narrow the gap on the Conservatives.

"YouGov showed a Tory lead of just four points as opposed to ICM which indicated an eleven-point lead. Whether Britons were seriously swayed in the aftermath of Saturday’s attack will be known on Thursday, but I think if the Conservatives manage to increase their lead it could potentially send GBP/USD above 1.3."

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LONDON — A Labour victory in Thursday's general election could actually end up being a major positive for the pound as the risk of a so-called "hard Brexit" diminishes, a new report from Pantheon Macroeconomics on Wednesday argues.

With voting in the UK's general election set to begin in less than 24 hours, the majority of pollsters and pundits are pointing to a Conservative Party win and a mildly increased majority for Prime Minister Theresa May.

Polls suggest that May's party holds a lead of around six points over Jeremy Corbyn's Labour, although outliers suggest that lead could be as big as 12 points, or as small as one point.

However, there is still a chance, albeit a slim one, that come Friday morning Corbyn could be set to become the UK's next prime minister, either as the head of a coalition, or — even less likely — after winning a majority in the House of Commons.

Last week, Business Insider wrote that a Corbyn victory could cause a big fall in the value of the pound, but in an analysis from staff at Pantheon, the research house suggests that the opposite could, in fact, be the case and that a Labour win may be the best election outcome for the pound.

That's effectively down to the party's less harsh stance on Brexit than the Tories.

"A surprise Labour win likely would boost sterling this time — in contrast to past precedent — due to the party's softer Brexit stance. Labour's manifesto promises to enter negotiations '... with a strong emphasis on retaining the benefits of the Single Market and the Customs Union'," Pantheon's Chief UK Economist Samuel Tombs writes.

"The party also has not committed to any numerical immigration targets. As a result, we think that the U.K. likely would remain a member of the European Economic Area, thereby retaining full access to the single market, after it has left the EU in 2019."

Any outcome where Labour wins the most seats would push the pound up to $1.32 against the dollar overnight, Tombs argues. That would take it to a level not seen since September 2016.

"From an economic standpoint, membership of the EU and the EEA are virtually identical, so some of sterling's post-referendum depreciation would be unwarranted," Tombs continues.

"Sterling would not recover to its pre-referendum level of $1.45, given that interest rates have risen in the U.S. but fallen in Britain since then. Still, we think that sterling would jump to $1.32 overnight and that it would appreciate further over the following months as a soft Brexit became the most likely outcome."

The pound is little moved on Wednesday as Britain enters the final day of campaigning ahead of Thursday's general election. By 12.30 p.m. BST (7.30 a.m. ET) sterling is 0.05% higher against the dollar, as the chart below illustrates:

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LONDON — The pound gained ground on Wednesday as Britain saw the final day of campaigning ahead of Thursday's general election.

Polls suggest that Theresa May's Conservative Party hold a lead of around six points over Jeremy Corbyn's Labour Party, although outliers suggest that lead could be as big as 12 points, or as small as one point.

While a big move in the price of sterling is expected once results start to come out on Thursday evening, investors in Britain's currency were largely in wait and see mode ahead of the vote.

Sterling was flat for most of the day before gaining ground mid-afternoon, thanks largely to weakness from the dollar as investors in the greenback started to worry about the political implications of former FBI Director James Comey's appearance in front of Congress on Thursday.

By 4.50 p.m. BST (11.50 a.m. BST) sterling was up 0.3% against the dollar to hit $1.2952, as the chart below shows:

When it comes to the election, markets are generally priced for a big Conservative victory, Samuel Tombs of Pantheon Macroeconomics wrote on Wednesday, even though some forecasting models predict a hung parliament.

"A comfortable Conservative win probably would boost sterling to only $1.30, given that it is the main scenario priced-in currently, and some hard Brexit risk will linger regardless of the size of the Tories' win. By contrast, we think sterling could fall back to around $1.26, if the Conservatives fail to win more than a handful of extra seats," Tombs wrote.

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LONDON — Implied volatility in the pound has spiked on Thursday as Britain goes to the polls in an election that is projected to be much tighter than had initially been expected.

Polls published overnight suggest that Theresa May's Conservative Party hold a lead of between six and eight points over Jeremy Corbyn's Labour Party, although outliers suggest that lead could be as big as 13 points, or as small as one point.

The most important poll, however, will be released at 10.00 p.m. BST (5.00 p.m. ET) when the UK's broadcasters release their jointly commissioned exit poll.

Until then, how Britain voted is anybody's guess, and as a result, overnight sterling volatility — a measure of how much the British pound is expected to fluctuate — has jumped above 30%, hitting levels similar to those seen prior to the 2015 general election and ahead of the Scottish Independence referendum. 

That remains well below the 80% hit in the run up to the Brexit referendum last June.

Here's the chart, courtesy of Reuters financial markets columnist Jamie McGeever:

What happens to the pound after the vote is still something of an unknown, and depends massively on how the UK votes. For example, a strong Conservative Party majority is projected by most forecasters as a positive for the pound, while a hung parliament — in which no party wins a majority of seats — is seen as the worst outcome. That's because in a hung parliament there would be little to no certainty about who could form a government, and currency markets hate instability.

"A comfortable Conservative win probably would boost sterling to only $1.30, given that it is the main scenario priced-in currently, and some hard Brexit risk will linger regardless of the size of the Tories' win," Samuel Tombs of Pantheon Macroeconomics wrote on Wednesday.

"By contrast, we think sterling could fall back to around $1.26, if the Conservatives fail to win more than a handful of extra seats," he added.

Opinions differ on what might happen to sterling in the event that Labour wins what pre-election opinion polls suggest is an unlikely victory. Some forecasters suggest that sterling could slump on the prospect of Jeremy Corbyn — whose policies would place punitive taxes on the City of London — as prime minister.

Tombs, however, argues that Corbyn's less aggressive stance on Brexit could be a good thing for sterling.

"A surprise Labour win likely would boost sterling this time — in contrast to past precedent — due to the party's softer Brexit stance. Labour's manifesto promises to enter negotiations '... with a strong emphasis on retaining the benefits of the Single Market and the Customs Union'," he wrote on Wednesday,

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LONDON — The pound is stable against the dollar and the euro late on Friday afternoon following Theresa May's confirmation that she will form a new minority government, likely propped up by an informal alliance with the Northern Irish Democratic Unionist Party.

Sterling dropped sharply on Thursday evening after the exit poll initially showed that no party would win a majority in the House of Commons and resumed its sharp slide in early trade in London on Friday morning after it became clear that the election had returned a hung parliament.

However, after news broke that May would visit the Queen and seek to form a new government, sterling stabilised, and remained stable after she officially confirmed that she will lead that government. 

May confirmed that she will seek the support of her "friends and allies" in the DUP in order to deliver a period of "certainty" for Britain as it heads towards Brexit talks.

Those words helped reassure investors in the pound that there would be no long-term uncertainty surrounding the future shape of the government, and sterling has remained anchored in the same place all afternoon. Here's how sterling looks by 4.15 p.m. BST (11.15 a.m. ET):

And here's how the pound looks against the euro at the same time:

The rationale behind the move in sterling is that markets dislike political uncertainty, so the prospect of a period without a government, particularly as the UK heads towards the beginning of formal Brexit negotiations, is not a nice one.

Kathleen Brooks, head of research at City Index noted earlier in the afternoon: "GBPUSD’s sell off earlier was sizable, down 300 pips at one stage, however, it has managed to claw back some of its losses, and was actually higher before we knew that Theresa May had managed to form a coalition government with the DUP, albeit with a slim majority."

"The fact that as we near the close of the European session GBPUSD is more than 200 pips higher than it was before Theresa May called the general election, suggests that pound traders are not in panic mode, and there are some aspects of this election outcome that been viewed favourable by the sterling market."

While sterling's initial drop was substantial, it pales in comparison to its fall after Britain voted to leave the European Union last June. Here's the chart, showing the respective drops:

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LONDON — The pound is continuing its post-election fall on Monday, dropping below the $1.27 during early afternoon trade. 

Sterling dropped sharply on Thursday evening after the exit poll initially showed that no party would win a majority in the House of Commons and resumed its sharp slide in early trade in London on Friday morning after it became clear that the election had returned a hung parliament.

However, after news broke that May would visit the Queen and seek to form a new government, the currency stabilised, and the market remained calm after she officially confirmed that she will lead that government. 

Normal service has resumed on Monday however, and the currency is down more than 0.6% against the greenback by 1.45 p.m. BST (8.45 a.m. ET). Its losses since the night of the election have now surpassed 2.2%.

Here is the chart:

The Conservatives failed to win 326 seats in the general election — the number needed to have an outright majority. But the party still won the largest number of seats and votes — with 318 seats and 12,667,213 votes (42.8% of the overall vote).

Prime Minister Theresa May is now trying to form a minority government with Northern Ireland party DUP leader Arlene Foster. There were statements from Downing Street that the DUP had agreed to the terms of a so-called confidence and supply deal. But the following day, the government backtracked on the statement.

Meanwhile, reports say that May's cabinet reshuffle is hinting at a "soft Brexit"— access to the Single Market but also adhering to the principles of the EU, like the Freedom of Movement act. It's pretty much the same Britain has now as an EU member but with a financial cost and the loss of negotiating power over EU legislation once it leaves the bloc.

A "hard Brexit"— something that May was initially pushing for — meant severing ties with the Single Market for total control of immigration.

"The direction of GBP in the future is still very much up in the air," Kathleen Brooks, research director at City Index wrote in a morning email.

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LONDON — The pound is up against the dollar and euro at lunchtime on Tuesday as it continues to recover following a post-election dip.

Sterling dropped sharply last week after the general election resulted in a hung parliament, but it has stabilised since May moved towards a formal minority government propped up by the Irish party DUP.

As of 12.45 p.m. BST (7.45 a.m. ET) the pound is up 0.55% against the greenback. Here is the chart:

And here's how it looks against the euro:

It remained in positive territory after government figures showed that the UK inflation rate jumped more than expected in May.

Lukman Otunuga, an analyst at FXTM, writes in a midday note:

"The sterling nudged higher during Tuesday’s trading session as investors made an effort to accept the reality of last week’s shock UK election outcome which resulted in a nightmare "hung parliament."

"Regardless of the current upside gains, the British pound remains vulnerable to heavy losses with the outlook tilted to the downside as political instability in the UK weighs heavily on the currency. This period of uncertainty is likely to leave investors on edge as questions are raised over the impact the general election results will have on Brexit negotiations.

"Although a hung parliament has heavily restricted May’s ability to deliver the hard Brexit that some had feared, and has even sparked optimism for a softer exit from the European Union, sterling continues to be overshadowed by the current instability in Westminster."

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LONDON — The pound is a little lower on Wednesday morning after a troubling set of wage data from the ONS reemphasised fears about the future of the UK labour market.

In its monthly release of labour market data, the statistical authority confirmed that while wages grew by 2.1% including bonuses and 1.7% excluding bonuses, average earnings adjusted for inflation actually fell by 0.4% including bonuses, and 0.6% excluding them.

Falling wage growth is a troubling sign for the economy and a concern for the markets. Consequiently, sterling has dropped, as the chart below illustrates:

Prior to the announcement the pound jumped to its highest level since the general election as investors continued to get over the initial shock of the vote and looked to the increased possibility of a so-called 'soft Brexit' following the Conservative Party's failure to win a majority.

Sterling dropped sharply on Thursday evening after the exit poll initially showed that no party would win a majority in the House of Commons, with the prospect of a period of uncertainty about who would govern the UK troubling the market. Sterling traded at $1.2950 against the greenback prior to that exit poll.

However, the currency stabilised on Friday afternoon after it became clear that Theresa May would seek to form a new government, likely propped up by the Democratic Unionist Party. 

"The Pound popped higher on Tuesday as currency investors remained cautiously optimistic over a softer Brexit following last week’s UK election outcome, resulting in a hung parliament. A vulnerable US Dollar played a role in the upside with short-term bulls sending the GBPUSD towards the 1.2775 resistance." Lukman Otunuga, a research analyst at FXTM writes in an email on Wednesday morning.

"Although the political uncertainty in the UK and pending Brexit negotiations are still in focus, much attention will be directed towards the UK jobs report this morning." 

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LONDON — The pound is marginally lower on Thursday afternoon, pulling back from a substantial jump that occurred early in the afternoon after the Bank of England held interest rates for another month, but struck a hawkish tone in doing so.

The bank's Monetary Policy Committee voted 5-3 in favour of holding rates at their current levels, when just one member of the committee had been expected to back a rate hike.

Those members cited concerns about inflation overshooting its government mandated target of 2% substantially in recent months as their reason for backing a hike.

Falling sterling has pushed up the price of importing goods, passing through to everyday items that regular Brits buy.

As a result of the hawkish hold, investors bought into the pound heavily on expectations that a rate hike could be closer than previously expected.

However, that rally was short-lived, and by 2.05 p.m. BST (9.05 a.m. ET) the currency is down against the dollar on the day, as the chart below illustrates:

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LONDON — The pound is a little higher on Friday morning as investors continue to digest a hawkish interest rate hold from the Bank of England, which as expected, left monetary policy unchanged on Thursday.

That means interest rates stayed at a record low of 0.25%, and the bank's QE programmes remain capped at £435 billion, despite the surge in the rate of inflation to the highest level since mid-2013.

Rates were left unchanged, but surprisingly the bank's Monetary Policy Committee voted 5-3 in favour of holding rates at their current levels. That signalled a possible shift in stance from the bank, with the horizons of an interest rate coming closer.

Sterling jumped on that initial announcement before falling away as the afternoon progressed. However, on Friday the currency has bounced back a little, climbing around 0.15% against the dollar, as the chart below illustrates:

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LONDON — The number of foreign tourists coming to the UK since the Brexit vote continues to surge as overseas visitors take advantage of the plunge in the pound's value since Britain elected to leave the European Union last June.

Figures from the Office for National Statistics, released on Friday, show that there were 3.7 million visits by overseas travellers in April 2017, up by 19% from the same time in 2016.

Not only did more tourists come to the UK, they also spent substantially more money. "Overseas residents spent £2 billion on their visits to the UK in April 2017; this is an increase of 20% when compared with April 2016," the ONS said in its release.

It should be noted that the Easter period was in April 2017, while it fell in March 2016, so this year's figures are boosted slightly by visitors planning trips around the Easter break.

As a longer term trend, the three-month by three-month figures — which are less volatile than a single month's data — also jumped.

"During the period February to April 2017, there were 8.9 million visits to the UK, which was 11% more than the corresponding period a year earlier. Holiday visits rose by 28% to 3.5 million for this period," the ONS said.

There is one big driver of this increased tourist traffic: the pound.

Since Britain voted to leave the EU on June 23 last year, sterling's value has dropped close to 14% against the dollar, while against the euro it has slumped roughly 1o% since two weeks before the vote.

That makes it far cheaper for tourists to visit the UK, and in particular its notoriously expensive capital, London.

As an example of how much cheaper Britain has gotten for tourists because of sterling's drop, a £4.50 pint of beer in a pub would have cost an American the equivalent of $6.66 before June, but would cost $5.75 now. In euros, the change is from €5.71 to €5.14.

April's data reflects a trend of increased tourist footfall in the UK since Brexit, with consumers from overseas looking to take advantage of a country that is traditionally one of the most expensive in the world for tourists. A similar spike in tourism also occurred in January.

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LONDON — The pound is slightly higher against the dollar and the euro at lunchtime in London on Monday, with Britain beginning official Brexit negotiations with the European Union.

Brexit Minister David Davis begins talks with EU officials in Brussels on Monday to work out a deal on Britain's exit from the EU and its future relationship with the bloc. Officials on both sides have until March 2019 to work out a deal, after which Britain will official exit the EU.

CMC Markets' chief market analyst Micheal Hewson says in an email: "The initial tone of these talks could well offer significant clues as to how long, protracted and adversarial they are likely to be."

The other major story on Monday morning is a "potential terrorist attack" in North London, where a van was driven into a crowd outside a mosque in the early hours of the morning. One person has been confirmed dead and at least 10 are injured.

Sterling was marginally lower against the dollar and euro in early morning trade in London. But, at close to 1.00 p.m. BST (8.00 a.m. ET), the pound is making gains against both.

Sterling is up 0.21% to $1.2790 against the dollar:

And the currency is up 0.09% against the euro to €1.1423:

The euro got an overnight boost after French President Emmanuel Macron secured a comfortable majority in parliament in Sunday's election.

However, Hewson cautions: "Macron will need to tread carefully, with some questioning the validity of his mandate on a 45% turnout, the lowest in fifty years.

"He will also face an enormous amount of resistance on the ground from the vested interests of the trade unions which still wield an enormous amount of influence, and could make life very difficult for the inexperienced new President and his party."

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