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.