Above: Boris Johnson. © Pound Sterling Live. Still courtesy of BBC News
The British Pound was bid higher on Tuesday following the release of a YouGov poll that showed the Conservative Party had extended its lead in their election polling series.
YouGov's poll for November 11 - 12 shows the Conservatives are on 42%, up 3 points on a similar poll conducted on November 08.
Labour have also seen their vote share grow, up 2 points to 28%.
The Liberal Democrats have shed 2 points to poll on 15%.
However, the biggest losers appear to be the Brexit Party who have lost 6 points to poll at 4%.
The Greens are polling unchanged on 4%.
There is a critical point to make in the latest polling: YouGov posed two different questions to respondents, one asking the traditional question, where people are shown a list of all the parties and ask how they would vote in an election tomorrow.
A second question was asked, where pollsters showed people a list of the parties and candidates who are likely to stand in their own seat, and asked which of them they would vote for. The candidates shown reflected both the seats where the Brexit Party would not stand, and the seats where the Liberal Democrats, Greens and Plaid Cymru have said they will not stand.
It is the second, perhaps more accurate, poll result that is headlined here.
The key focus for currency markets is the difference in points between Labour and the Conservatives, where a 14 point lead hints at a strong majority for the Conservatives on December 12.
Markets are particularly interested in YouGov polls owing to the organisation's track record on the matter. It was YouGov that proved the most accurate in polling the 2017 election result, including a dramatic and sudden plummeting of support for Theresa May who ultimately saw the Conservatives lose their majority in Parliament.
The British Pound has become increasingly attuned to polls since the campaign for the snap December 12 General Election was called, and the reaction by the Pound confirms it favours the prospect of a Conservative majority.
Above: Sterling ticked higher on the release of a YouGov poll on Tuesday afternoon.
The Pound's positive correlation to increasing odds of a Conservative majority is simply because such an outcome ensures economic continuity, but perhaps more importantly, it offers a swift passing of the Brexit Withdrawal Agreement Bill in early 2020.
This will put to bed months of political uncertainty, and potential unlock withheld business investment.
"The most bullish scenario for GBP given our assessment of these issues is likely to be a large Conservative majority, in line with the current opinion polls. Yes this would deliver Brexit but Johnson would have the political wiggle room to slowly dilute the relatively hard Brexit currently envisaged in the political declaration. At the very least a large majority would limit the ability of the ERG to block an extension to the transition period beyond end 2020," says Paul Meggyesi, an analyst with JP Morgan in London.
At the time of writing the Pound-to-Euro exchange rate is quoted at 1.1682, up from today's low at 1.1619
The Pound-to-Dollar exchange rate is quoted at 1.2866, up from the day's low at 1.2815.
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