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  • Sterling took a knock today after new research from YouGov suggested

  • that the conservatives could fail to win an overall majority

  • in the UK's June the 8th general election.

  • The pollsters' findings caught the market's attention

  • when they were released during Asian trade,

  • and the pressure stayed on the pound for much of the European morning

  • by enough for it to fall under its closing level on April the 18th,

  • the day Theresa May called the election.

  • But the pound pared its losses as a more nuanced view of the research emerged

  • and the less dramatic findings of other polls were factored into investors' thinking.

  • Sterling fought back from its low point under $1.28,

  • back above that level, leaving it steady overall on the session.

  • Analysts currently agreed that the importance of UK politics

  • as the main near term influence on the currency, is difficult to overstate.

  • During the campaign, the pound has generally risen with the poll ratings of the government,

  • and come under pressure when there's a perception that the election races tightened.

  • The turbulence leaves the pound short of its recent high of $1.30,

  • which came when expectations of a bigger conservative majority peaked.

  • Don't forget, the pound was trading at over $1.48 before the Brexit vote last year.

  • While that valuation is a distant memory,

  • it does look as if investors will need to stay tuned into UK politics

  • after the labor party's strong campaign, and significant fight back in the polls.

  • The longer term outlook for the pound will, of course,

  • be defined by the makeup of the next government,

  • and what investors think that will mean for

  • the kind of Brexit agreement it will reach with the EU.

  • But before the polling that really matters, at the ballot box on June the 8th,

  • there is likely to be further volatility ahead.

Sterling took a knock today after new research from YouGov suggested

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How the pound is trading ahead of UK election | Markets

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    Jerry posted on 2017/06/16
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