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Sterling Stays Steady

Sterling kept within its recent trading range this morning, but this week could prove its second best so far this month as expectations that the Conservative Party may win a majority in the Dec. 12 national election fuel investors’ optimism.

British Prime Minister Boris Johnson’s Conservatives have a 10-point lead over the main opposition Labour Party, a poll by Savanta ComRes showed yesterday.

On a campaign trip to central England, Johnson promised he would end the “unbearable” uncertainty around Brexit if he wins the election, saying that political paralysis was affecting investment decisions in the country.

Elon Musk, chief executive of U.S. electric vehicle maker Tesla TSLA.O, was quoted as saying he had decided to build a new factory in Berlin, not Britain, because Brexit posed too much of a risk.

However if you look at the polls and everything, it seems that it’s more likely than not that the election will result in a Conservative majority and if that’s the case, I suspect that Brexit will completely come off the headlines and the pound will gain more upside momentum.

In economic data the pound remained unmoved by weaker-than-expected British retail sales, which rose 3.1% year-on-year in October. Economists polled by Reuters were expecting a 3.7% increase.

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