And one Tory-backing journalist has pointed the finger at Remainers, suggesting a hung Parliament had serious implications for sterling in the days and weeks to come. Sterling fell to as low as $1.3107 and last stood down 0.1 percent at $1.3140, giving back about a cent after hitting an eight-and-and-half-month high of $1.3215 on yesterday – prior to the publication of the huge YouGov MRB poll. It also fell to 0.8449 pound per euro, off the two-and-a-half-year high of 0.8394 which it touched earlier this week.
The YouGov MRB poll suggested Mr Johnson was on course to win a majority of 28 in parliament at Thursday’s election, down sharply from a forecast of 68 last month.
The pound had rallied for the past couple of months on rising expectations that Johnson will secure an outright majority in parliament after a December 12 election to end Britain’s political paralysis over Brexit since 2016.
The dollar was traded at 108.74 yen, flat in early Asia after a gain of 0.15 percent the previous day.
Tom Harwood, a reporter on the Guido Fawkes website, tweeted: “Remainers take note: YouGov’s assessment that a hung parliament is within the margin of error has crashed the pound.
“Sterling had risen on predictions of a Tory majority.
“Those who pretended to care most about the pound in 2016 are now suspiciously silent.”
Pro-Brexit campaigner Darren Grimes likewise bemoaned the findings of the poll, adding: “If, on a massive 43% vote share, the Conservative Party could still be unable to govern, we have to ask if our electoral system is fit-for-purpose.”
Speaking yesterday, prior to the publication of the poll, Michael Brown, a senior analyst at foreign exchange and international payments firm Caxton, said: “A narrower Tory majority, say under 20 seats, would, despite the likely initial rally, likely exert pressure on sterling as 2020 progresses, with nerves likely to return over the potential of a no-deal departure at the end of the transition period in Dec 2020.
“While extremely unlikely, a Labour majority is likely to result in significant downside for the pound, with market participants’ focus likely to quickly switch towards Labour’s sweeping economic plans instead of focusing on Brexit.
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“Despite Labour’s plans for a 2nd referendum potentially leading to a revocation of Article 50 in mid-2020, concerns over plans for nationalisation of industry, changes to share ownership and proposals for a four-day working week are likely to pose a stiff headwind to sterling, dragging the pound to the low $1.20s and low €1.10s.”
BlackRock’s head of fixed income strategy Scott Thiel said: “I think the polling is tricky.
“It’s very difficult to call the outcome of a political event so we are going to be concerned of our ability to get this right or wrong.”
While gains in sterling are expected to be less pronounced in the event of a Conservative majority, given the market is largely pricing this in, much larger losses are expected if that fails to happen, ING analysts said in a client note.
Nigel Green, founder and chief executive of deVere Group, warned: “A hung parliament would intensify current uncertainty – due to there being the possibility of another EU referendum and another Scottish independence referendum.
“The uncertainty would not only weigh on the pound but it would continue to dampen business investment which, of course, will drag on economic growth.”
Kyosuke Suzuki, director of foreign exchange at Societe Generale, said: “With regards to both the UK election and US-China talks, markets have been leaning towards optimism recently.
“Therefore we need to be careful about market reactions if those expectations do not materialise.”