Is The British Pound Still Falling? Election Brings Uncertainty To English Currency

The British pound fell dramatically Friday morning after election results showed that the Conservative Party had lost the majority in Parliament.

After the release of the exit polls late Thursday, the British currency lost as much as 3 cents on the dollar and then fell as low as $1.2636 in Asian trading hours as the final results were announced early Friday morning, according to CBS.

The pound rebounded back to $1.27 after Prime Minister Theresa May announced Friday she would form a coalition government with the support of Democratic Unionists to provide more "certainty."

READ: UK Elections 2017 Results: Who Will Be Next Prime Minister As Exit Polls Predict Hung Parliament

May leads the Tory party which came up eight seats short of getting the 326 required to make up a majority of the British Parliament, creating a "hung parliament." With 649 of 650 seats in the House of Commons declared, the Conservatives had 318 to the Labour Party's 261.

May met with Queen Elizabeth II and made a short statement outside Downing Street on Friday. The prime minister said she intended to form a government with the Democratic Unionists to form a government that would "provide certainty" and "lead Britain forward at this critical time for our country," according to the BBC.

"Our two parties have enjoyed a strong relationship over many years," she said. "And this gives me the confidence to believe that we will be able to work together in the interests of the whole United Kingdom."

READ: UK Elections 2017: Theresa May Wants To Work With Donald Trump, But She Could Lose

The European Union's budget commissioner Guenther Oettinger said Friday he was unsure if Britain's negotiations about leaving the EU — known as "Brexit" — could begin on time after the Thursday election failed to elect a clear winner, according to a report by Reuters.

"We need a government that can act," Oettinger told radio station Deutschlandfunk. "With a weak negotiating partner, there's the danger that the negotiations will turn out badly for both sides... I expect more uncertainty now."

The talks with the EU about Brexit are supposed to start in just ten days.

Multiple people in May's oppositional parties — the Labour Party and the Liberal Democrats — urged May to quit. The leader of the Labour Party, Jeremy Corbyn, urged her to resign, saying he is "ready to serve" himself, while the leader of the Lib Dem, Tim Farron, said she "should be ashamed" and should resign "if she has an ounce of self respect."

May called for this snap election in order to strengthen Tories majority in Parliament ahead of the talks with the EU about Brexit.

However, she struggled to gain positive traction in the polls after performing poorly in interviews and refusing to participate in televised debates with the other party's leaders. She also told Scottish leaders that it could not hold a second referendum on its own independence from the U.K. for six years — or as long as the Brexit negotiations were still going on.

May inherited the prime minister post following David Cameron's resignation last June after the Brexit referendum.