Pound surges on election news

19 April, 2017

Pound surges on election news

The British pound jumped to a 4 month high in today’s trading against its US counterpart after a snap election was called by British Prime Minister Theresa May for June 6.

At 3.03pm (GMT) the pound was trading at $1.2742 up from $1.2566 in yesterday’s trading.

The reason why the Prime Minister called the election, is to reduce uncertainty surrounding Brexit and her conservative party are expected to win by a landslide which will give them the mandate to push through key changes and put them in a better position surrounding Brexit negotiations.

The pound was under pressure before the announcement but the surged as investors welcomed the news of increased political stability.

“With Brexit negotiations on the cards, the Prime Minister has sought to strengthen her hand by calling a General Election. A successful election in June would likely provide May with a larger majority, one that would ease the process of agreeing terms of negotiation in Westminster”. Noted Nancy Curtin, chief investment officer at Close Brothers Asset Management

“Unless we see a political upset, a greater source of clarity and confidence will be welcomed by investors as Brexit discussions get underway in earnest.” she added.

According to some analysts, this maybe just the start of things to come, and as Brexit negotiations begin with a new and stable government the pound will make further gains.

"Everything points to the Tories being elected with a substantially increased majority which will give the Government a firm mandate and put it on steadier, more solid ground as it begins the difficult, complex work of negotiating Brexit. This can only reduce uncertainty and the potential for hiccups over the next couple of years," said Paul Mumford, a fund manager at Cavendish Asset Management.


Source link  
US dollar in for a tough year

The US dollar finished off 2017 mostly weaker against the major currencies despite 3 rate hikes from the US Federal Reserve and although...

RBA misleads investors on AUD

The Australian dollar has dropped sharply in today's Asian trading session on the back of disappointing data and throws into question yesterday...

Brexit doubts pressure pound

The British pound has enjoyed a good run against its US counterpart ever since rumors spread that the EU and the UK were close to reaching a deal...


Gold steady ahead of key news

The gold price is trading slightly higher today as the market awaits the senate testimony later today from Jeremy Powell who is Donald...

Gold looks to go past $1300

The gold price remains well supported today after yesterday’s stellar gains on the back of a less than convincing speech from The US Federal Reserve...

Gold remains supported

After falling sharply on Monday, the gold price has stabilized over the last 2 days and it looks as if for now, the precious metal has found strong...


US dollar hit from 2 sides

The US dollar is under pressure against the major currencies today as fears grow over the possibility of tax reform as well as disastrous results...

Australian dollar has further to fall

The Australian dollar is under further pressure today after yesterday’s spectacular plunge which seems to have put to bed any interest rate hike...

Gold technical review

The gold price has finally stabilized today after suffering 3 days of heavy losses and we may be in the process of a double bottom formation. It seems as if the news out of Spain...

  


Share: