British pound strength, a hedge against Greek uncertainty?

WITH the UK election results still on everyone's minds, the British pound has nonetheless been quick to price in a departure from previous months of uncertainty.

While the Conservative party win spells a tighter fiscal policy, the markets have shrugged this off, giving the party its own vote of confidence to the tune of a swift £/US$ rally.

Strong economic fundamentals also continue to support the trend of the pound's strength. Recent UK retail sales in April have risen more than forecast, outperforming +1.2 per cent month on month against a consensus of +0.2 per cent. Coupled with an unemployment rate of 5.5 per cent, the lowest since 2009, UK's economy seems to be on track for recovery.