UK election and GBP on 12-Dec-2019

UK election is ahead on 12-Dec-2019, which held first time on December since 1923.
According to the latest polls, it predicts Tory's majority while it's not comfortable enough to avoid a hung parliament.

Evening Standard: UK opinion polls: Conservatives set for majority of 28... but hung parliament possible as support drops
YouGov has interviewed approximately 100,000 people about their voting intentions in the past seven days.
It said the margin of error could put the final number of Tory seats anywhere between 311 and 367, suggesting a hung Parliament cannot be ruled out.
Sterling fell by around a third of a cent against the US dollar after the news. Financial markets fear a hung parliament would extend the uncertainty over if or when Britain will leave the European Union, which it is currently due to do on January 31,

As mentioned on the above story, outcome of the hung parliament will drag GBP down sharply as the uncertainty over Brexit consequence.
EURGBP is currently near the level after the Brexit referendum 2016.
If British constituencies successfully avoid the hung parliament, the Tory's Brexit deal is expected to be passed before 31-Jan. (some days of technical extension maybe in the worst case.) In this case, GBP will be stronger, approaching toward the level before the Brexit referendum (EURGBP below 0.80).
If it resulted as a hung parliament, EURGBP could jump to around 0.90 - 0.92 up to the highest in 2019.

In the meantime, today's trend and momentum of EURGBP indicates the upward direction in a coming week including the UK election date, which implies the possible hung parliament outcome...
While we recommend to watch out the latest polls, it is also interesting to see if the indicator still reasonably work under the critical event against the market. Let's see tomorrow.


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