The Book has displayed as of yesterday evening a huge increase, gaining more than 400 pips in a few hours, in the face of a positive result for the markets of the general elections which were held yesterday, according to the surveys of exit polls.
The prime minister of the United Kingdom, Boris Johnson and his conservative party have won a clear majority of the parliamentary seats.
The survey of Ipsos (PA:ISOS) Mori – commissioned by Sky News, the BBC and ITV – was published shortly after the close of polling in the United Kingdom, 22 hours, London time.
The poll predicted that the conservatives would gain 368 seats in Parliament, a gain of 50 seats compared to the elections of 2017.
Since then, various surveys and counts were made to confirm this result.
A party usually has need of more than 320 seats to have a majority in the House of commons to adopt legislation. The labour party opposition was to lose 71 seats with a figure of 191. The Liberal Democrats, the centrists were to get 13 seats, the Party Brexit none, and the scottish national Party’s 55 seats.
“Boris Johnson seems to have won the general elections in the United Kingdom by a huge margin,” said Kallum Pickering, senior economist at Berenberg, in a research note.
He added that a victory of this magnitude would mean that the wing eurosceptic and hard of the conservative Party would have less importance than previously, which would reduce the risk of Brexit hard, which reassures also the markets.
Recall that the agreement of Brexit concluded with the EU by the prime minister Boris Johnson has been approved in principle by the Parliament of the United Kingdom, but has not yet been fully ratified by the legislators.
Deep divisions about the proposed agreement and the extent to which the United Kingdom is expected to stay close to EU after his departure from the block and questions on the future of the border between the Republic of Ireland and Northern Ireland have been points of friction, major, that have led to an impasse and the political chaos in the House of commons, which has in the end forced the government to organize general elections precipitated Thursday.
Johnson had promised to the population that a vote for his conservative Party “would be in accordance with the Brexit”. The main opposition party, the labour party, was on his side pledged to renegotiate an agreement of Brexit with the EU and then submit it to a public vote. The liberal democrats had promised to cancel completely the Brexit.
As regards the reaction of the Book, it should be noted that the GBP/USD rose from a low of 1.3050 in the early evening to a peak at 1.3515 after the poll quoted in this article, a threshold that had not been touched since may 2018.
The EUR/GBP has dipped to a low of 0.8275, the lowest since July 2016, after a peak at 0.8507 during the day yesterday.
Finally, the EUR/USD pair also takes advantage of the perspective to see the Brexit finalized, the Euro having hit 1.12 to the Dollar yesterday evening for the first time since mid-August.