British Pound strengthening before nearing elections

Investors estimate victory of conservatives in Britain’s elections

The pound grew to its highest in last two years.

According to surveys conservatives are ahead of the Labour Party in 11 percentage points. Only few days before UK early Parliamentary Elections Johnson’s chances to defend his premiership significantly grew. Investors perceive the situation positively as it increases probability that the UK will finally finish off Brexit.

The optimism is obvious in the Pound trading which grew to its highest versus the Euro in last two years. Even though investors are not happy about Brexit, they want it to proceed the smoothest possible way since there’s no evidence that Brexit would not happen. Uncertainty is always worse that certainty that an event (may it be negative) will happen.

Progression of Pound rate will depend on the fact whether current pre-election survey will lead to expected election results. In the end it won’t be that important whether the Tories win but how much. The worst possible result would be a scenario in which none of dominant parties could form majority government. Yet, such scenario is unlikely to happen.


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