A brief take on how the pound may trade in the run up to voting day
Barring any major hiccups in parliament over the amendments to the election bill, the UK looks set to head to the polls this December.
The key question for currency traders will be, how will the pound perform based on election sentiment ahead of voting day?
As it stands, the Tories are odds-on favourites to win a majority and that is good news for the pound. Not only does that take away uncertainty from a change in political leadership but it also potentially moves us closer to resolving the Brexit impasse.
However, if history is any lesson, a lot can still change between now and December. You can just ask Theresa May how it all fell apart for her in the 2017 election.
As such, if Labour support starts to gain any surprising momentum over the next few weeks, that would be bad news for the pound.
Not only does it risk throwing a wrench in the works of getting closer to a Brexit deal being approved, Corbyn's economic proposals have long been scrutinised for potentially negatively impacting the UK economy.
However, one thing is clear now with an election being all but confirmed, is that the risk of a no-deal Brexit has certainly subsided and I reckon that in itself should lend some support to the pound in the near-term.
