- British Tories win to seal biggest majority in decades.
- Brexit by January 31st promise looking more likely.
- Pound surges into the weekend.
The British Pound made further gains this week to cap a very bullish few days for the nation. The currency posted gains for the third consecutive week at 1.33 against the U.S. Dollar in what was a frantic, rollercoaster couple of days. The currency has now gained 3% overall since just the start of December.
Tory election win brings new sense of hope
A lot was riding on the British election, the outcome of which was always going to be hugely significant in both the direction of the currency and the ongoing Brexit journey. As it happens, a sweeping victory by Boris Johnson and his conservatives seems to have done the trick for now.
Johnson and his winning MPs have proven that this impromptu general election, criticized by many, has turned out to be something of a masterstroke in the overall scheme of things. It was a favorable outcome that had looked likely for some time, but by a distance that nobody could have predicted. Even the most prudent of pollsters would term it a landslide.
Brexit door swings open further than ever
It is nothing short of a saga that has rolled on and on. The debate and digression were arduous at the best of times. One thing that has been made abundantly clear by the conservatives’ biggest parliamentary majority in some three-decades? – The people have spoken. The electorate too had become tired of the impasse. This is something which the confidence and subsequent spike in the GBP has also backed up.
It now looks increasingly likely that the promise made by PM Johnston that Brexit would be brought about before January 31st will be proven true. Naturally, this is good news for both he and most likely the British currency on the world stage, at last in the short-term.
Parliamentary members will reconvene on Tuesday of next week for the official swearing-in from their 365 seat haul with a jump down to business and possible cabinet reshuffle looking very likely as early as next week.
Will GBP strength hold up in the coming weeks?
All of this moving and shaking leaves the GBP in a very interesting position as the markets reopen on Monday and in the coming weeks and months. The currency had remained quiet in the early part of last week, poised for what was to follow. What did was an almighty surge on Friday followed by a slight correction that still leaves Sterling in a very strong position.
The fact that the US Dollar continued to show its weak side this week. Fed chairman Powell kept their rates policy unchanged for the moment. This is bound to have helped bolster the Pound in the Forex market at least somewhat. Moving into next week, all eyes will be on the Bank of England monetary report to see how the currency reacts. For now though, things are looking good for Boris and his GBP.