Pound Climbs to 6-Month High After Call for Early U.K. Election
- Sterling gains versus all G-10 peers as long-held shorts bail
- Advance casts shadow over USD as Treasury yields also weigh
Is Sterling on a Perpetual Devaluation?
The pound extended gains made during the European session, rising to its highest since early October at 1.2905, after U.K. Prime Minister Theresa May announced a snap election for June. The surge put fresh pressure on the dollar, which stayed near session lows.
Trading flows were lopsided and sterling-centric as the pound rose versus all of its G-10 peers, gaining more than 2 percent against the Canadian and Australian dollars. Strong sterling demand saw traders unwind long-held pound shorts. The election is seen as a chance for May to strengthen her hand as the U.K. enters into Brexit negotiations with the eurozone and after an opinion poll Monday showed the Conservatives with a 21-point lead over Labour.