LONDON, June 2 (Reuters) - British Prime Minister Theresa May calling a snap election seemed like the best news imaginable for all those wondering when they could call the bottom of the pound's Brexit-driven 20 percent fall.
Yet six weeks on, all sorts of doubts have set in.
Strategists, traders and bank salespeople fell over themselves on April 18 to argue the election would strengthen May's hand over hardline eurosceptics in her own party and, more generally, remove election risk from imminent talks with Brussels on Britain's departure from the European Union.
Even if she fell short, they said, a weaker majority might also force her to pay more heed to other views in parliament that are softer on issues of immigration and access to the EU's lucrative single market.
The pound surged almost 4 percent in three weeks, topping $1.30 for the first time in six months and prompting banks and the big asset managers who dominate financial markets to cash in profits made betting against sterling since last June.
But in the past 10 days of conflicting opinion polls, that boost has evaporated and investors now face Brexit talks, and all the difficult headlines they will bring, with sterling again looking vulnerable.
In trade-weighted terms, the pound is back where it was on April 9.
"Would I want a big bet on how the election's going to go? Bluntly, no, because there's so much volatility around the polling," said Mike Amey, head of sterling portfolios at giant bond investor PIMCO.
"We don’t have a big position on the currency, we think that sterling and bonds are on the richer side. (But) it doesn’t seem like an obvious period, with sterling where it is, to run a very big position one way or the other."
Some wonder why the pound hasn't fallen more.
Sterling has a history of weakening in the run-in to closely fought elections as well as one of falling when the Conservatives' poll ratings are worsening. reut.rs/2qR2HK4
Foreign exchange traders in London have always preferred the prospect of a right-leaning government that keeps a lid on public spending and taxation of their bonuses.
Yet sterling's falls of the past fortnight pale in comparison with others since last June.
One reason is that this is no ordinary election.
The market has got used to May's plan for Britain's divorce from Europe, but for financial investors it is still the wrong one - the same "hard Brexit" blueprint that had them selling the pound aggressively last September and October.
"Alternative scenarios look worse short-term, but better further out," Morgan Stanley analysts said in a note to clients this week.
"With a smaller majority for the Conservatives than today or a Labour-led government, we would assume a more negative initial reaction to greater political instability, but a softer Brexit, higher spending and stronger medium-term growth prospects than in our base case."
Others, notably the world's second biggest currency trader JPMorgan, took a similar line this week.
Another element is the growing familiarity of investors with big political risks over the past two years and the extent to which most have tended to avoid positioning heavily for one result or another ahead of major events.
Donald Trump's election last November, like the Brexit referendum before it, taught investors to keep their money off the table until the results were in.
"I could see a scenario like the U.S. election, when the market tried to sell the dollar (after Trump won) and then began to think about the actual policies and we then saw a rally that lasted weeks," says Lee Hardman, a strategist with giant Japanese financial group MUFG.
"A progressive coalition could lead ultimately to a stronger pound. If there was a left-leaning coalition of Labour and Lib Dems (Liberal Democrats), obviously the Brexit strategy would be ripped up."
So if there are bets against the pound, for now they have been taken where they are cheapest - in the options market.
The one-month sterling-dollar risk reversal - a measure of the balance of bets for more falls of the currency in the next month over those for more gains - hit its most negative since early February on Wednesday.
Analysts from Canadian bank RBC calculate that the market currently prices in a Conservative majority of 85 seats, down from an earlier peak of 160.
"The longer-term implications of the election are more ambiguous, but sterling's preference for a larger expected Conservative majority is clear in the short term and the risk is that both fall further," the bank's head of G10 FX strategy Adam Cole said in research sent to clients on Friday.
Additional reporting and graphics by Vikram Subhedar, Ritvik Carvalho and Jamie McGeever; editing by Andrew Roche