UK prime minister Boris Johnson’s Conservatives won a commanding election victory – the biggest since 1987 – shaping up a lucky Friday the 13th.
Britain’s election delivered a bigger-than-expected parliamentary majority for Prime Minister Boris Johnson’s pro-Brexit Conservative party. Thus, the prospect of a hung parliament and another Brexit delay vanishes. It now holds a majority in Parliament, which means Johnson has an easier path to push his Brexit bill through a vote.
Markets consider that this result paves the way for Britain to negotiate its departure from the European Union by Jan. 31. But, with a trade deal deadline of December 2020, the uncertainty is far from over.
The sterling has rallied to mid-2018 highs against the dollar and the highest level since 2016 against the euro. The British currency soared, on course for one of its biggest one-day gains in the past two decades.
The U.S.-China trade war looked set to de-escalate after U.S. sources said Washington had set out its terms for a trade deal with China. But Beijing’s silence raised questions over whether the two sides can agree a truce in their trade war before a new round of tit-for-tat tariffs takes effect. Further, neither Washington nor Beijing made official statements about a deal.
New Chinese tariffs on U.S. goods are due to take effect at 0401 GMT Sunday. Some scepticism remains and traders will be waiting until the tariff deadline has passed before believing in the deal.
START TRADINGForex – Lucky Friday for Brexit supporters after UK vote
The pound is the main mover, and it remains to be seen if it can actually build on these gains to make fresh highs.
The dollar fell more than 0.5% on Friday. Global risk appetite was boosted by the apparent clearing of two clouds that have been hanging over world markets. The dollar index was down 0.6%.
The Australian dollar rose 0.2% to $0.6925 after briefly touching the highest since July.
The New Zealand dollar also jumped to $0.6636 to reach the highest since July.
The Japanese yen fell 0.3% and is approaching its lowest versus the dollar in more than six months as demand for the safe-haven currency went down.
The euro was up 0.4% against the dollar, having hit a four-month high in overnight trading.
The pound sterling was last up 1.7% versus the dollar, at $1.3393. Versus the euro it was last at 83.45 pence.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money