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    British Pound Surges on BBC Exit Poll

    Initial reaction in the FX market is that Sterling surged against the US Dollar and the Euro. The BBC exit polls released at 10pm (London) estimates that the Conservative Party have gained a larger amount of seats than had been estimated, approximately 316, meaning that they are the largest party.  The Tory’s wouldn’t have enough seats to have an outright majority (326 seats), however the market’s reaction is that they believe the Conservatives will hold power in some form or another, which is strength for Sterling.

    EURGBP rallied 88 pips within the first few minutes, trading to a session low of 0.7280.  The move in GBPUSD was even larger rallying nearly 2 cents from 1.5245 to 1.5411, reaching  the session high of 1.5447. 

    The surge in the pound is a reaffirmation from the markets that a Conservative government is a net positive for the UK economy. The upside overnight for the pound is limited from here (1.5420), however traders will be protecting their downside and realising the gains from any long GBPUSD and short EURGBP positions. 

    The night is still young with potential for exit polls to prove to be inaccurate, however the initial move is a rally for the British Pound.

    GBPUSD: 1.5410

    EURGBP: 0.7300

    (23:13pm London)

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