Chris Turner, Global Head of Strategy at ING, points out that GBP is holding onto the sizable gains made right after the exit poll came out and is the largest single day rally since January 2017.
Key Quotes
“Given what seems to be the convincing nature of the win, known early, GBP may not have too much further to rise short term, but a re-pricing of the interest rate curve in early Europe could provide a little more upside.”
“Coming up to five hours after the exit poll release, GBP/USD has settled into a relatively tight 1.3450-1.3500 range. The big move has happened and all the results we’ve seen so far corroborate the exit poll. The 2.7% jump in GBP/USD has been the largest one day move since January 2017.”
“Given what looks to be a convincing a Conservative win, it seems unlikely GBP/USD has too much more to rally in the very short term. The biggest one-day rally over the last five years (3%) has nearly been matched. Perhaps we could see a move to the 1.3550/75 area in Europe.”
“As above, if the majority of the short-term GBP move has been seen, the focus shifts to UK interest rate and equities markets. These open at 0800 GMT and will presumably see some sizable adjustments.”
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