Pound hits one-week high as poll suggests Tories to win majority

[LONDON] The British pound jumped to a one-week high after reports on a much-anticipated poll suggested that the ruling Conservative party is on track to win a majority in the UK's December election.

The currency strengthened to US$1.2948 following the report, up from around US$1.2900 beforehand, and beat all Group-of-10 peers. The survey of voting intentions landed during the market's witching hour, with US trading desks quiet before the Thanksgiving holiday and as Asian traders were just starting their Thursday.

Boris Johnson's Conservative Party is on course to win a large majority of 68 seats in the Dec 12 vote, according to a YouGov poll, which used a technique that more closely predicted the 2017 election than standard surveys.

"It will be an important indicator as it correctly predicted the 2017 election result," said MUFG analyst Lee Hardman, speaking before the results were released.

"The polls would have to narrow more materially to drag cable below US$1.28, and on the other hand it is hard to see cable breaking above US$1.30 until after the election."

The UK currency has been tracking opinion polls closely ahead of the Dec 12 election, and fell Tuesday as surveys of voter intention suggested the Conservative lead was narrowing.

Markets prefer the certainty offered by a majority government, with a Conservative win seen as the best outcome for those betting on pound gains, according to a recent Bloomberg survey.

BLOOMBERG