British pound stalls ahead of U.K. election

Since falling to its weakest level in more than three decades against the dollar on Sept. 3, the British pound has been on a tear. It has risen by nearly 10% to its strongest level against the dollar since May and its highest against the euro since May 2017.

What's happening: Currency traders are shaking off fears of a no-deal Brexit. Polling ahead of Thursday's election shows the Conservatives in the lead and they are expected to gather behind Prime Minister Boris Johnson's Brexit plan.

Yes, but: As the election draws near, traders have lost their nerve and the currency has been little moved since closing above $1.31 on Dec. 4.

• “Nothing is priced in,” David Bloom, global head of foreign-exchange strategy at HSBC, told Bloomberg in November. “The political outcome will determine the future of the currency.”
• Bloom projects that if Britain can negotiate an orderly exit from the EU, the pound could rise to $1.45 by the end of next year. But, a no-deal Brexit could see it tumble to $1.10.

Go deeper:

• U.K. election: Polls put Boris Johnson on track for a pro-Brexit victory
• Why Trump cares about this week's U.K. elections