"Sterling and stability. Two words finally seen together"

David Lamb, Head of Dealing at Fexco International Payments, comments:

“Sterling and stability. For three and a half years these words have seldom been seen together.

“Now finally they might. As the sleep-deprived incredulity of the morning after fades, the Pound is drifting. But nevertheless it shows no sign of giving up the gains it made as last night’s momentous exit poll came in.

“Breathless talk of a Brave New World for sterling maybe overblown, but two fundamental factors that had been holding down the Pound have changed.

“Firstly the scale of the Conservatives’ victory means Boris Johnson’s withdrawal deal should sail through Parliament, finally breaking the Brexit deadlock that has so tortured the markets.

“Equally the size of Mr Johnson’s majority will give him a freer hand in the nitty gritty of trade negotiations next year. He will no longer need to pander to Britain’s hardcore leavers – meaning the end result could potentially be a softer, more market-friendly Brexit.

“The threat of a chaotic ‘no deal’ has not gone away but it has receded, and for now the Pound is likely to cruise in a higher trading range than it has done for years.”

 

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