The pound rose to a two-and-a-half year high against the euro yesterday, as recent polls indicate that a Conservative majority is the most likely outcome of the general election. This is positive for sterling because the uncertainty of a hung parliament would be avoided, and it’s thought that a Tory majority will solve the Brexit impasse. Sterling also reached a seven-month high against the dollar yesterday.
With the election being ‘Boris Johnson’s to lose’, a large proportion of potential improvement for the pound is likely to already be priced in, potentially minimising the upward potential but leaving plenty of downside risk, which could take effect if the polls change or turn out to be wrong.
After the NATO summit yesterday, Boris Johnson said that there was “very great solidarity” between members of the alliance and praised the US as being a “pillar of stability” on security issues. Also speaking to reporters yesterday, Labour leader Jeremy Corbyn said that his party would be committed to maintaining the NATO alliance.
Yesterday, Johnson pledged to deliver Brexit and a tax cutting budget within 100 days of winning the election.
