Pound drops against Singapore dollar as election poll suggests Tory lead faltering

Sterling weakened versus all of its Group-of-10 peers on the survey of voter intentions. PHOTO: BANK OF ENGLAND

LONDON (BLOOMBERG) - The pound fell in early Asia trading on Wednesday (Dec 11) as an update to an election poll which successfully predicted the 2017 election suggested British Prime Minister Boris Johnson's Conservative party is on track to win a smaller majority than previously projected.

The UK currency weakened versus all of its Group-of-10 peers on the survey of voter intentions ahead of Thursday's election. The market has been betting on a win for the Conservatives, seen as the more market-friendly option thanks to the party's policies and Mr Johnson's pledge to take Britain out of the European Union by the end of January.

Against the US dollar, sterling sank as much as 0.4 per cent from Tuesday's New York closing levels, to US$1.3108 in early Asian trading on Wednesday. It touched the strongest since March on Tuesday.

Against the Singapore dollar, the pound similarly weakened by 0.4 per cent to $1.7846 as of 8.50am, from its Tuesday close. To date this year, though, the pound is up by 2.8 per cent against the Singdollar, having ended 2018 at $1.7355.

The YouGov poll shows the Tories on track to win 339 seats in the House of Commons, with Labour securing 231. That suggests that when smaller parties are included, it would leave a Conservative majority of 28. The previous iteration of the poll two weeks ago projected a majority of 68.

"Anything sub-340 will not be welcomed by the market," according to a note from Jordan Rochester, an FX strategist at Nomura, in a note before the poll's release.

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