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Value of pound surges after Commons wrestles control of Brexit from PM Johnson

Election call: Boris Johnson
Election call: Boris Johnson

By David Chance

The pound rallied for a third day yesterday and looked set for a big bounce back from its lows against the euro and the dollar after Parliament took control of the Brexit legislative agenda.

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The currency, which has been the worst-performing major in the world this year, staged a rebound to trade at levels stronger than 90p to the euro, which itself was rising against the dollar.

It rallied to 89.6p to the euro from a low of 91.46p on September 3 - a rise of more than 2%.

"So far, sterling has benefited from the mix of the success MPs have had in legislating against no-deal Brexit and the stretched short-pound positioning," investment bank ING said.

Its economists James Smith and Peter Krpata added: "But with early elections looming, we expect the pound to soon re-start its weakening trend, given election uncertainty and the non-negligible risk of a no-deal Brexit if the Conservative party wins a parliamentary majority under Boris Johnson."

Their view seems to run contrary to most expectations, at least according to a Reuters poll that said if there were a negotiated Brexit, the pound would trade at between 85p and 88p against the euro.

The median forecast range was 95p to 100p in the event Britain crashed out without a deal, according to the poll of 66 economists.

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Mr Johnson is now pressing for a general election and the Conservatives have a commanding lead over the Labour Party in opinion polls.

Belfast Telegraph