admin On Monday, the British Pound hit a fresh 31-month high against the Euro after two polls showed gains for the Conservative Party, confirming expectations that the party of Prime Minister Boris Johnson remains on track to secure a majority.
According to a BMG poll for the Independent, the Conservatives up two points to 41% and Labour down 1 point to 32% and a poll out from Survation for ITV’s Good Morning Britain show had the Conservatives up 2 points to 45% and Labour down 2 points to 31%.
“As is normal as an election date draws closer, the level of respondents we interviewed who said they were undecided this week’s poll was 12%, down from 17% last week – and so some of the movement we are seeing in this week’s polling may be driven by the public, having seen the various TV debates and manifesto launches simply making their minds up,” says Survation, in a briefing on their latest poll findings.
On the Conservative Party’s ongoing strength, Survation says, “the Conservative party has increased support to some extent in this polling amongst both Leave and Remain voters.”
Any lead of over 7 points suggests an outright majority, while a lead of 14 points would signify something close to a landslide. “GBP is rallying again after markets all but fully discount a good Tory majority, ignoring the high number of undecided voters – Friday will show whether that was a good strategy or not,” says Elsa Lignos, Global Head of FX Strategy with RBC Capital Markets.
The polls suggest a Sterling-friendly trend remains in place with just four days to go until what is being billed as the most important election of a generation: the Pound-to-Euro exchange rate rose to its highest level since May 2017 when it reached 1.1893 on Monday. The Pound-to-Dollar exchange rate on the other hand is quoted at 1.3160, just below last week’s 7-month highs at 1.3162.
“Judging from recent polls, the most likely scenario is the Conservative party win majority government. If this scenario pans out, GBP/USD can edge higher towards 1.3500 over the next few weeks as the UK would be on the way towards an orderly Brexit on 31 January 2020,” says Kim Mundy, a foreign exchange strategist with CBA.
Magazine 
