Rolling coverage as the financial markets react to the Conservative Party’s election triumph, and a breakthrough in the trade war
- Introduction: Sterling hits 18-month high vs US dollar
- Investors welcome clarity on Brexit
- Pound up three cents vs US dollar – one of biggest gains in a decade
- The mood on the trading floor
The big picture is that sterling is at its strongest level against the euro in three years, as fears of a disorderly Brexit next month are banished.
The pound is holding firm over €1.20 — it’s not closed that high since June 2016.
“What a night! While the polls – and indeed the markets – were prepared for a Conservative win, it certainly wasn’t of this magnitude.
“Investors are going to be relieved, and the pound has already rocketed on the back of the exit polls as fears of a hung parliament were removed.
In terms of markets today, a Conservative majority is likely to be well received as it unlocks the political process, gives some certainty over Brexit and removes the risks of the anti-business policies of the labour manifesto, such as nationalisation.
The pound is dipping back slightly as investors digest the election result, but is still on track for one of its best days in a decade.
Sterling is currently up 2.6 cents at $1.3420, which I think is its fifth biggest daily surge since December 2009 (taken from 10pm GMT last night).