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British pound soars against US dollar as exit poll predicts Conservative majority

by AP
12 Dec 2019 at 23:06hrs | Views
The pound has soared against the dollar and the euro as an exit poll predicted a Conservative majority.

Sterling hit an 18-month high against the dollar and was in touching distance of pre-Brexit referendum levels against the euro.

A pound was up 2.21% to 1.347 dollars and up 1.38% to 1.205 euros.

Reaction from the City was one of relief, with traders previously expecting to stay up all night comfortable that the exit poll will play out.

Neil Wilson, chief market analyst at Markets.com, said: "Markets hate uncertainty but they would have hated a Corbyn government a lot more.

"This looks like a comfortable evening ahead – the margin of victory is huge and even if it is not quite as big as the exit poll indicates, the Conservatives will still have a huge majority."

An 86 majority is predicted for the Conservatives, with many in the City fearful of Labour's plans for nationalisation.

Dean Turner, an economist at UBS Wealth Management, said: "We've long said that sterling looks a very cheap currency. If Brexit is indeed completed by the end of January, we see the pound trading as high as 1.35 against the US dollar.

"However, a long-term lack of clarity on Brexit and sterling to produce minimal UK earnings growth next year."

The London Stock Exchange opens at 8am and is expected to also surge, with shares in energy, telecoms and banks expected to rise – although the strengthening pound could knock shares in internationally-focused companies.

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Source - AP

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