(Bloomberg) — The British pound jumped to a one-week high after reports on a much-anticipated poll suggested that the ruling Conservative party is on track to win a majority in the U.K.’s December election.
The currency strengthened to $1.2951 in early Asia trading following the report. The survey of voting intentions landed during the market’s witching hour, with U.S. trading desks quiet before the Thanksgiving holiday. Sterling traded up 0.1% at $1.2932 at 1:23 p.m. in Singapore.
Boris Johnson’s Conservative Party is on course to win a large majority of 68 seats in the Dec. 12 vote, according to a YouGov poll, which used a technique that more closely predicted the 2017 election than standard surveys.
“The survey results appear to be good news for the pound as markets form a firmer view of a Brexit deal getting through,” said Janu Chan, senior economist at St. George Bank Ltd. in Sydney. “It reflects some relief that political uncertainty will likely cease.”
The U.K. currency has been tracking opinion polls closely ahead of the Dec. 12 election, and fell Tuesday as surveys of voter intention suggested the Conservative lead was narrowing. Markets prefer the certainty offered by a majority government, with a Conservative win seen as the best outcome for those betting on pound gains, according to a recent Bloomberg survey.
“It will be an important indicator as it correctly predicted the 2017 election result,” Lee Hardman, a currency strategist at MUFG Bank Ltd. in London, said before the results were released. “The polls would have to narrow more materially to drag cable below $1.28, and on the other hand it is hard to see cable breaking above $1.30 until after the election.”
–With assistance from Ruth Carson.
To contact the reporters on this story: Charlotte Ryan in London at [email protected];Vivien Lou Chen in San Francisco at [email protected]
To contact the editors responsible for this story: Paul Dobson at [email protected], Neil Chatterjee, Nick Baker
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