Pound holds steady as decision day continues in the UK

It’s election day in the UK but there is no mystery about what is going to happen. The Conservatives are going down in flames with YouGov’s MRP poll forecasting Keir Starmer’s Labour will win 431 seats, up 229 from 2019, with the Tories on 102, down 263 seats from the last election.

That would leave Labour with a majority of 212.

Even if those numbers are off by 50%, Labour will still win. I can’t see any realistic scenario where there is a market reaction to the results. Note that Labour moved to the centre during the election and is promising not to raise taxes.

This will be the end for Sunak and he may lose his own seat as well, with rumours that he’s headed to California afterwards.

The good news for the UK is that the political instability will end tomorrow. You can’t say the same thing about France, the eurozone in general, the US and Canada. That should offer the pound some level of comfort, or at least an opportunity.

For now, the chart isn’t showing much in the way of life, but if US economic data continues to stumble, the pound could be a market go-to.

This article was written by Adam Button at www.forexlive.com.