The pound surges following Tory boost

Sterling hit its highest level against the dollar in almost two weeks, before easing slightly, buoyed by investor expectations that the Conservative Party would be victorious in tomorrow’s general election and would probably win a majority of parliamentary seats.

The pound has tended to react positively to signs that UK prime minister Theresa May’s party would win the snap election since she called it seven weeks ago, as investors bet that a strong majority would translate into a better bargaining position in exit talks with the EU, which begin this month.

However, after hitting eight-month highs above $1.30 in mid-May, sterling fell to as low as $1.2770 by the end of the month, as polls showed the race tightening between the Tories and the Labour Party.