The pound has hit its highest level in two and half years against the euro as currency traders are betting on a Conservative victory in next week’s election.
Sterling soared to 1.1812 against the euro after reaching 1.1826 on Wednesday, against the dollar the currency was up by 0.75% to 1.3091.
Michael Hewson, an analyst at CMC Markets said, “The pound has broken out, trading at its highest levels against the euro since May 2017, while also breaking higher against the US dollar on diminishing expectations that the Labour party will be able to get close enough in the polls to deny the Conservatives a majority next week.”
He added, “Given the experience of 2017 this seems a little premature, however short positions are getting squeezed hard, and this is helping pull the pound higher.”
Connor Campbell, an analyst at SpreadEx said, “Bloomberg chucked the markets a lifeline on Wednesday, revealing that a ‘phase one’ trade deal is very much still on despite the various obstacles that have emerged in the last week or so.”