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Pound declines – Latest YouGov poll shows no majority election win

The British pound dropped today after a new poll found that British Prime Minister Theresa May’s Conservative Party risks falling short of an overall majority in the June 8 national election.

New constituency-by-constituency modeling by YouGov showed the Conservative Party might lose 20 of the 330 seats it holds while the opposition Labour Party could gain nearly 30 seats, The Times said.

The news came after a string of opinion polls show a narrowing lead for May’s Conservatives, shaking the confidence among investors that she would easily win a majority in the election.

The narrowing in the polls has clearly dented sterling’s performance and continues to weigh on the currency, and is probably likely to do so in the near term.

Investors continued to await clues from the European Central Bank that it would wind down its bond purchase program this autumn as planned in light of indications that the Eurozone economy is improving. But ECB President Mario Draghi on Monday repeated the need for “substantial” stimulus.

The main scenario is that the ECB will eventually taper its stimulus, although Draghi has given no hints about this as of now, and that is weighing on the euro.

The dollar edged higher against other major currencies on this morning, recovering from losses posted after the release of mixed U.S. economic reports on Tuesday.

The dollar weakened after data on Tuesday showed that the CB consumer confidence index fell to 117.9 in April, compared to expectations for a rise to 119.8.

However, the U.S. Commerce Department said consumer spending rose 0.4% last month, in line with economists’ forecasts. It was the biggest increase in four months.

Inflation rebounded, pointing to firming domestic demand that could allow the Federal Reserve to raise interest rates in June.

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