UK election risk for sterling – ABN AMRO
Bill Diviney, Senior Economist at ABN AMRO offered a brief insight about the upcoming UK general election on Thursday, wherein the Prime Minister Boris Johnson’s Conservative Party is expected to win a majority.
Key Quotes:
“The UK goes to the polls in a general election on Thursday, and we should have a good idea of the outcome on Friday morning. The latest opinion polls still show the Conservatives with a comfortable lead, with the Britain Elects poll of polls moving from 11.2pt lead at the start of the campaign to a 9.7pt lead as of today. Individual polls range from a 6-15 point lead. Should the ultimate outcome be closer to the lower end of that range, we could yet end up with a hung parliament.” Read more”¦
GBP and UK election: Asymmetric sterling reaction
GBP price action after the election will be asymmetric; less pronounced gains on a market-friendly outcome vs more meaningful losses on a non-market friendly outcome. A Conservative party majority should send EUR/GBP to 0.82/0.83 within a day. A hung parliament should lead to EUR/GBP spiking to 0.87. The asymmetry applies to spillovers into other G10 FX. Read more”¦
Election looms large over UK markets
In less than 24 hours Britons will head to the polling booths for the 3rd general election in the past 5 years. Ever since the pandemonium which ensued in the markets following the 2016 EU referendum, big political events have garnered a greater degree of interest amongst traders and they now eagerly await another that has the potential to cause quite a stir. Read more…
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