THE pound jumped in the foreign exchange markets as soon as the exit poll was released last night, and it consolidated its gains as the actual election results confirmed the initial news of a Tory romp. Having started the night at $1.5263 and €1.3541, the pound had jumped to $1.5521 and €1.3831 by 5.45am. Investors had clearly expected a much more muddled result, with days or weeks required to form a government. They were thus pleased both at the relatively decisive nature of the result and that a business-friendly Conservative party had been returned.
The result was also expected to give a boost to the equity market, with spread betters indicating that the FTSE 100 index would open almost 90 points, or 1.3% higher. The result was likely to be positive for the banking and energy sectors, which were expected to be hit by higher taxes and price freezes under a Labour government.
Nevertheless, both the pound and...Continue reading
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