On the back of the increasing political uncertainty the pound fell as much as 4 cents against the dollar – the sharpest intra-day decline for more than a year. If you look at the short positions now being held by traders, worse could be about to follow. For markets a hung parliament – whether controlled by a Labour or Conservative administration – is the nightmare scenario. The fear being that a weak administration will lack the mandate (and the will) to make the necessary cuts to get to grips with the public deficit. In the run up to the general election it's not just the political classes that will scrutinise every nuance of every opinion poll.   Related Articles Pound falls to 10-month low on election uncertainty Lord Adonis warns 200mph rail upgrade should not be abandoned Move over, Labour - we need courage and commitment Cornwall council local election 2009 MPs' expenses: Jacqui Smith - her rise and fall Disaster for Gordon Brown as Labour falls below Lib Dems in new poll Even before the weekend polls an increasing number of hedge funds and speculators were betting against the pound.[Read more...]