Pound Spikes Higher after Tory Win

The British pound has powered higher during the Asian trade session on Friday. Traders are watching, very closely, the exit results out of the United Kingdom that are showing a landslide victory for Prime Minister Boris Johnson’s Conservative (Tory) Party.

This victory will end a political deadlock in the United Kingdom that has been holding up Britain for the last several years. This is boosting the appeal of the pound.

Traders are also monitoring headlines that the United States and China have reached, in principal, a preliminary trade agreement. Details are still scarce and Forex traders want more on the status of existing and future tariffs as well as when this agreement will be actually signed.

This trade agreement has pushed sentiment and commodity linked currencies like the New Zealand and Australian dollars.

Looking at the EUR/GBP Forex market, the pound is up two percent, which pushes this market lower. The EUR/GBP was trading at 0.8280 at last glance and its highest price point since July 2016.

The GBP/USD currency exchange rate has soared two percent to trade at 1.31516. This is its highest price point since May 2018.

The British currency had plunged ten percent after their initial vote to leave the European Union in June 2016.

Pound Spikes Higher after a Big Hurdle to an Orderly Brexit has now been Cleared

The Conservative Party led by UK Prime Minister Boris Johnson has, apparently, won a landslide victory, with at least an 86 seat majority, in the general election. The Labour Party, led by Jeremy Corbyn, has conceded defeat. Jeremy Corbyn has also announced his resignation as head of his party.

The United Kingdom is set to leave the European Union in an orderly fashion by January. Traders will now be watching trade talks. Both Britain and the EU must now negotiate a new free trade agreement (FTA).

On the economic calendar, today, the world’s largest economy will be releasing monthly retail sales as well as their monthly core retail sales data.