The British pound remains above the $1.29 mark in today’s trading session against it’s US counterpart after the organization YouGov released their highly trusted polling model, that gives Current UK Prime Minister Boris Johnson’s conservative party a solid lead over it’s major rivals
The Conservatives would win 359 seats, Labour 211, the SNP 43, and the Liberal Democrats 13 if the election were held today, according to the poll which holds a lot of weight as a similar oneby YouGov held in 2017 predicted the result when Former UK PM Theresa May called a snap election and lost her majority which completely shocked the markets as all other polls showed here winning by a big margin.
Although the Pound sterling received a significant boost from the polling numbers, the market is still skeptical to push the currency higher as figures can change and anything could happen between now and polling day in the middle of next month..
“Nothing is currently priced" and the election results “could have dramatic impacts on Sterling and on the 13th of December, whatever Sterling is trading at now, it will not be trading at on that day. So how can you price anything in, it's very difficult when you look at the opinion polls and you work it out simply it looks like a Conservative majority but it's not that simple it's quite a complicated set of circumstances and it's still completely open, anything can happen," said David Bloom at HSBC
There are 3 outcomes for the pound, which is a Conservative majority, a minority government led by the Labour party or a hung parliament which is what currently exists and if this is still the situation after the 13th of December to British currency is likely to suffer.
This is because it would once again place a no deal Brexit on the table and would most likely force the UK government to hold a 2nd referendum to finally let the people decide once and for all if they want to leave the UK or not.
The amount of time it would take and the duration of such an event would leave the UK economy in limbo.
The no deal scenario is what sent the pound crashing down to multi year lows earlier in the year and the currency is seen falling even lower if a no deal eventuates.
That’s why HSBC’s leading currency analyst is expecting a big movement, depending on what happens in December.
"I really think it all balances on deal or no deal, that's a complete game changer for the future of the UK. If we get a deal we're saying we will power ahead, suddenly you take politics and you switch it off for a while and there is a fiscal boost and Sterling is cheap and all that investment that wants to come into the UK, house prices go up and it's off to the races and you're galloping away, beautiful, we could eventually by the end of next year be at 1.45. said Mr Bloom
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