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Tags: Forex | Asia | pound | dollar | Britain | vote

Pound Jumps at News of Conservatives' Win in UK

Friday, 08 May 2015 06:12 AM

The British pound jumped Friday after exit polls showed Prime Minister David Cameron's Conservatives headed for victory, while the dollar won support on hopes for a solid U.S. jobs report later in the day.

In Tokyo afternoon trade, sterling fetched $1.5500 against $1.5262 in New York, while the euro sank to 0.7236 pounds from 0.7382 pounds.

Exit polls indicated Cameron's Conservatives have defied expectations to win the most seats in Britain's general election, falling just short of the clear majority needed to govern alone.

As results came in, a projection by the BBC put the Conservatives one seat short of a clear majority.

"The Conservative Party are perceived to be more market-friendly than a Labour government and that's really at the core of the game," said Sebastien Galy, a currency strategist at Societe Generale.

"Having said that, with a Conservative government, some people will reassess" their positions longer-term owing to the increased risk of Britain exiting the European Union, he added.

A Conservative-led government would mean Britain will press ahead with holding the EU membership referendum promised by Cameron by 2017.

"The market was expecting a messier, closer-run outcome in the exit poll," said Daragh Maher, a foreign-exchange strategist at HSBC Holdings.

"Perhaps the market was a bit short pound into the poll expecting a tight call, and now that is being unwound," he said.

The BBC forecast gave the Conservatives 325 seats, Labour 232 and the Scottish National Party 56. That would put Cameron's party just one seat shy of being able to govern without the support of smaller parties.

Opinion polls had indicated for months that the Conservatives and Labour were virtually tied.

In other trading, the dollar rose to 119.87 yen, from 119.75 yen in New York.

The euro slipped to $1.1224 and 134.56 yen on Friday, down from $1.1266 and 134.91 yen in US trade.

On Thursday, the weekly U.S. unemployment claims report came in strongly positive, with the moving average falling to a 15-year low.

Markets were geared up for the Labor Department's jobs report Friday to gauge whether the economy is strong enough for the Federal Reserve to begin raising ultra-low interest rates, which would be a plus for the dollar.

The dollar was mixed against other Asia-Pacific currencies.

It firmed to Sg$1.3298 from Sg$1.3285 on Thursday, to 33.50 Thai baht from 33.37 baht, and to 63.95 Indian rupees from 63.85 rupees.

The greenback also climbed to 13,205.10 Indonesian rupiah from 13,093 rupiah and inched up to Tw$30.70 from Tw$30.69.

The dollar weakened to 1,088.85 South Korean won from 1,090.65 won, and to 44.64 Philippine pesos from 44.65 pesos.

The Australian dollar fell to 79.15 U.S. cents from 79.91 cents as Chinese exports unexpectedly fell and the Reserve Bank cut growth forecasts, saying further depreciation in the currency "seemed both likely and necessary."

The Chinese yuan edged up to 19.31 yen from 19.26 yen.

© AFP 2021


Europe
The British pound jumped Friday after exit polls showed Prime Minister David Cameron's Conservatives headed for victory, while the dollar won support on hopes for a solid U.S. jobs report later in the day.In Tokyo afternoon trade, sterling fetched $1.5500 against $1.5262 in...
Forex, Asia, pound, dollar, Britain, vote
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2015-12-08
Friday, 08 May 2015 06:12 AM
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