The British pound tumbled after an exit poll from Thursday's UK election showed Theresa May's Conservative party may have lost its majority in the British Parliament, surrendering large gains to Jeremy Corbyn's Labour party.

Although Conservatives remain the largest party in Parliament, sterling dropped sharply immediately after the poll results were released.

The exit poll predicted a marginal Conservatives lead of 314 seats against Labour 266, Liberal Democrats 14, Scottish National Party 34 and other 22. 326 seats are required for a majority.

A hung parliament would be significant as it means that more parties would have to carve out a coalition government.

Forex investors have been increasingly concerned about a coalition government due to the upcoming tough Brexit negotiations with the European Union — passing legislation can be a difficult process with two parties with their own political agenda.

GBP/USD crashed to 1.2700, down more than 1.70 percent, the lowest since April 18, when sterling traded as low as $1.2513. EUR/GBP surged higher to 0.8824 more than 1.2 percent higher.