The pound has surged more than two percent as Prime Minister Boris Johnson's Conservative Party won a resounding election victory. 9News
The pound rocketed 2.5 percent higher to $US1.3516 – its highest since May 2018 – in the immediate aftermath of the exit polls. It later settled at $US1.3472, up 2.3 per ent on the day.
Against the Euro, sterling rose as high as 82.80 pence, up more than two percent on the day, leaving the pound at levels last seen in July 2016, shortly after the Brexit referendum that hammered the currency."Markets will start focusing on the longer-term outlook of what a future trade relationship with the EU will look like and the pound's gains will be capped in the $US1.35-$US1.37 area," said Joel Kruger, a currency strategist at LMAX Exchange.
Johnson faces the daunting task of negotiating a trade agreement with the EU, possibly in just 11 months, while also negotiating another trade deal withPeter Kinsella, global Head of FX strategy at UBP said the pound's gains was a "relief rally" that the Labour Party underFTSE 100 futures edged 0.2 percent higher. The exporter-heavy FTSE 100 often weakens when sterling rallies.
Corbyn's nationalisation plans have weighed on UK domestic stocks and energy and transport shares were tipped to climb when the stock exchange opens on Friday. Yields on British government bonds are set to rise as investors buy into riskier assets such as stocks.
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