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Sterling bounces back after General Election early slump

The pound bounced back into positive territory after Prime Minister Theresa May announced a general election would take place on June 8.

It sent the pound up 0.1% against the US dollar to 1.257, recovering from a 0.3% drop just an hour earlier.

Versus the euro, the pound was hovering near the flatline at 1.180, rising from a 0.4% loss.

Investors were digesting news of the snap election, as Downing Street had previously denied plans for a poll before 2020.

Neil Wilson, senior market analyst at ETX Capital, said: "For investors it adds another layer of complexity to an already uncertain picture for UK and European assets.

"Volatility is likely to remain elevated over the coming weeks. And as elections are so unpredictable, there is always the outside risk it could spark a reversal in the entire Brexit process.

"However, on the current polling, the likelihood is we will be left with a Government on a more secure footing that will ensure Brexit means Brexit."

The news sent London's blue chip index lower, dropping 1.25% or 91 points to 7236 points - weighed down in part by sterling's rise.

Multinational stocks on the FTSE 100 tend to benefit when foreign currencies are stronger.

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