FX: Pound falls against dollar after Brown calls election
Forex Pros – Sterling fell against the U.S. dollar on Tuesday, after British Prime Minister Gordon Brown called a long-awaited election and a poll showed that the ballot may result in no party securing a majority in parliament.
GBP/USD hit 1.5129 during European morning trade, a 4-day low; the pair subsequently consolidated around 1.5168, shedding 0.86%. Cable was likely to find resistance at 1.5816, the high of Feb. 17, and support at 1.4781, the low of March 1.
Earlier in the day, Brown today announced that the general election will be held on 6 May and told voters that his Labour party would make the "big decisions" that would secure the future of the embattled U.K. economy. His comments came after an ICM poll showed that Labour had cut the opposition Conservatives' lead to just four points.
Sterling also tumbled versus the yen, with GBP/JPY plummeting 1.33% to reach 142.43.
Also Tuesday, Bank of England data showed that Britons pumped GBP 4.04 billion of housing equity between October and December last year, as low interest rates spurred homeowners to pay down debt. Meanwhile, a private report showed that British construction activity increased during March for the first time since February 2008.
