GBP has been one of the strongest G10 currencies lately as investors enjoyed a prospect of snap elections that could strengthen May’s hand in Brexit negotiations. GBP seems to be the only G10 currency that has been holding ground against the US dollar this week as the GBPUSD remains above 1.29.
The latest Survation poll shows that Conservatives enjoy a support of 47%, far above Labour at 30%. What is more remaining parties hover just about the border of relevancy with LibDems at 7% and UKIP at just 5%. It just shows that it were Conservatives and not populist UKIP that was able to capitalize on the Brexit prospects.
While we are cautious to jump on this GBP bullish bandwagon as renewed Conservative mandate could re-call those Hard Brexit talks, for now a strong support for the rulling party seems to be working in favour of the pound.
The currency will face an important test this Thursday as we have the Bank of England meeting.
While GBPUSD has been consolidating because of the GBP strength, GBP has been gaining against the yen and the Aussie.
GBPJPY shows a strong and consistent upward trend. Source: xStation5