November 14, 2019 / 10:02 AM / a month ago

Sterling steady as traders see Conservative majority after election

* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv

By Olga Cotaga

LONDON, Nov 14 (Reuters) - Sterling kept within its recent trading range on Thursday but this week could prove its second best so far this month as expectations that the Conservative Party may win a majority in the Dec. 12 national election fuel investors’ optimism.

British Prime Minister Boris Johnson’s Conservatives have a 10-point lead over the main opposition Labour Party, a poll by Savanta ComRes showed on Wednesday.

On a campaign trip to central England, Johnson promised he would end the “unbearable” uncertainty around Brexit if he wins the election, saying that political paralysis was affecting investment decisions in the country.

Elon Musk, chief executive of U.S. electric vehicle maker Tesla TSLA.O, was quoted as saying he had decided to build a new factory in Berlin, not Britain, because Brexit posed too much of a risk.

“For quite a few people the UK has been uninvestable... because of this political risk, for the confusion more than anything else,” said Luca Paolini, Pictet Asset Management’s Chief Strategist.

“But if you look at the polls and everything, it seems to me that it’s more likely than not that the election will result in a Conservative majority and if that’s the case, I suspect that Brexit will completely come off the headlines,” he said.

“There will be some sort of soft Brexit, one way or another, and investors will move on.”

Brexit Party leader Nigel Farage said earlier this week he would not contest the 317 seats the Conservatives won in the 2017 election, a step that could pave the way for a majority in parliament for Johnson’s Brexit deal.

However, Farage dismissed demands to stand down candidates fighting the Labour Party, saying his main aim was to win seats in parliament to hold Johnson to account over Brexit.

He also turned down the offer of an electoral pact with the Conservatives, the Daily Telegraph newspaper reported.

The pound was last neutral at $1.2854 and slightly higher versus the euro at 85.58 pence.

The currency remained unmoved by weaker-than-expected British retail sales, which rose 3.1% year-on-year in October. Economists polled by Reuters were expecting a 3.7% increase. (Reporting by Olga Cotaga Editing by Gareth Jones)

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