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Pound climbs to 18-month high as Conservatives seal majority

Pound climbs to 18 month high as Conservatives seal majority

Pound rose to the highest level in 18 months versus the U.S. dollar on Friday after the victory of the Conservative Party, headed by Prime Minister Boris Johnson, with a majority in Brittan’s Parliamentary elections.

As of 09:35 GMT, the British pound trader higher against the U.S dollar at 1.3388 after hitting a peak of 1.3514, which is the highest level since May 2018.

The GBPUSD pair recorded a rise of more than 2 percent when preliminary results were announced showing the triumph of the Conservatives party.  

Against the euro, the British currency rose to the highest level in three years at 0.827, while currently hovering around 0.8343.

The overwhelming majority of the Conservatives managed to break the political deadlock surrounding Britain’s exit from EU and put an end to the threat of a second Brexit referendum.

"With this mandate and with this majority, we will finally be able to complete Brexit," Prime Minister Boris Johnson said.

In trade war side, U.S President Donald Trump has said,” the United States is very close to completing a major trade deal with China”.

Now, the UK would leave the EU on January 31 and enters a status quo transition period until December 31, 2020.

On the other hand, the dollar index traded lower at 96.80 after opening on a downside gap, amid news reports that U.S. and China were still formulating a written agreement but an “agreement in principle” had been reached.

The White House has offered to cancel the next round of tariffs on Chinese goods that will come into effect on Sunday, a press report said on Thursday.

The United States has proposed halving current tariffs on Chinese products by $360 billion, the report added.

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