Pound soars against dol­lar and euro

The Scotsman - - ELECTION 2019 -

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 per cent to 1.347 dol­lars and up 1.38 per cent 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 Tories, 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.”

Andy Scott, as­so­ciate di­rec­tor at JCRA, said: “Ster­ling soared higher by over 2 per cent as ner­vous traders who had been sell­ing ster­ling dur­ing the day, just in case it was an­other hung par­lia­ment, be­gan buy­ing it with gusto. I sus­pect there was as much re­lief, as there was ex­cite­ment at the size of the ma­jor­ity that was so un­ex­pected.”

The Lon­don Stock Ex­change was ex­pected to also surge this morn­ing, 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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