The Pound moved higher against all of it’s peers today after more opinion polls suggested that the Conservatives will win the upcoming election with a majority and will finally be able to push through Boris’s deal with the EU.
GBP/USD broke through $1.31 at the mid-market, the best level we have seen since May this year, and GBP/EUR broke €1.18 for the first time since May 2017. With the Pound being undervalued since the referendum in 2016 this correction to rates has been long awaited and welcomed by investors and analysts alike.
The move against the USD has been helped by the better than expected Services PMI released this morning but it has also been boosted by the fact it has broken through the psychological barrier of $1.30.
However, there is some caution coming out from the city with investors pointing to the unreliability of polls over the past few years and the fact polls usually narrow the closer you get to the polling day. If this is the case, you would expect the Pound to retrace some of its recent gains and move back to levels we saw in October.