LONDON, April 19 Sterling hovered a cent below
Tuesday's six-and-a-half month highs against the dollar on
Wednesday, the jury still out on whether it can make more
progress on the back of optimism around the shock calling of a
June 8 parliamentary election.
The pound's almost 4-cent surge, half of it in U.S. trading
time, in the previous session, cleared out a large portion of
the record bearish bets against the currency that have dominated
trading since the Brexit referendum last June.
The prospect of a stronger majority for prime minister
Theresa May, who leads the opposition Labour Party by 20 clear
points in opinion polls, has spurred hope that will lay the
ground for a slower, more orderly departure from the European
Union after 2019.
But traders remain cautious on backing more gains into a
weekend liable to dominated by the first round of French
elections. UK retail sales numbers on Friday could also provide
more evidence of sinking consumer demand and economic growth
into the election.
"It isn’t quite the one way street that a lot of people have
painted over the last 20 hours," said Richard Benson, co-head of
portfolio investment with currency fund Millennium Global in
"With a 20 percent lead off the starting blocs, I would have
thought the risk is more that it will narrow than grow. A
positive surprise from the French election would also presumably
see a squeeze higher in the euro after the weekend."
After briefly gaining on the day, sterling traded 0.15
percent weaker compared to the U.S. close at $1.2818.
It was also down 0.2 percent at 83.69 pence per euro.
(Reporting by Patrick Graham; Editing by Jamie McGeever)