Belfast Telegraph

Pound rises sharply as Tory victory is expected

By Donal O'Donovan

The pound gained sharply yesterday to hit a two-and-a-half year high against the euro and a level rarely seen since the Brexit referendum in June 2016.

Sterling rose to 83.93p to the euro at one stage on Monday as opinion polls overwhelmingly indicate Boris Johnson's Conservative Party winning decisively in Thursday's General Election.

In early August a euro bought 94 pence sterling, as investors feared a real risk of a crash out Brexit.

The euro has been above 80p since the Brexit vote, and traded in a range of 85p to 90p most of that time.

The latest swing reflects belief in the markets that the Conservatives will win convincingly on Thursday, ending the hung parliament that has made passage of Brexit-related legislation almost impossible since the last UK election in 2017.

The strength of the current swing stronger for the pound means any political upset could see the currency whipsaw. UK polling companies failed to call either the 2016 Brexit vote or the election a year later correctly.

Specialist banks Investec said its Treasury dealing desk will work late on Thursday to cover the impact of the election, with any action likely to happen after a media reporting restriction ends and exit polls emerge after 10pm.

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