Pound Steadies after poor start to the week
The Pound has managed to recover most of its losses against the Euro, US Dollar and other major currencies that we saw yesterday after the latest YouGov poll steadied sliding expectations for a Torie majority in the Dec 12th general election.
The poll shows a conservative win of 43% over opposition labours 32%. However, it has confirmed a trend that is also being reported by other surveys: that labour is continuing to grow in popularity. Many will be reminded of a similar trend in 2017 that ultimately saw labour shrink an 18-point deficit at the start of the campaign to just 2 points on the day of voting. The Pound dipped off yesterday after investors saw the odds of a conservative majority fall from an 18-point lead to 11 in just over a week.
Sterling is currently tracking the odds of a Conservative majority: the currency spiked on Monday when those odds hit 70%, according to the Betfair Exchange. But, polling out on Monday and Tuesday meant these odds had slid back to 66%, knocking the Pound back in the mid 1.16’s again the Euro and mid 1.28’s against the US Dollar.
If momentum remains with Labour it increases the odds of a hung parliament where no one party secures an outright majority, but the YouGov result went some way in calming markets and the Pound has steadied from Tuesday’s wobble. A hung parliament could well prove that the Brexit question cannot be answered by a General Election, and a hung parliament might presumably not offer a clear route to a second referendum either.
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