The Great Britain pound jumped today after Britain’s Prime Minister Theresa May made a surprise announcement that general elections will happen in June.
May shocked markets by announcing that a snap general election will be held on June 8. The voting was originally scheduled to happen in 2020. That was a total surprise as the Prime Minister was repeatedly saying that she does not plan early elections.
With that said, experts argued that the decision makes sense for the Prime Minister. Her Conservative party has a healthy lead according to opinion polls, meaning that the elections can allow the governing party increase its majority in the Parliament, making it easier to pass legislation necessary for smooth Brexit process. Additionally, May argued that if elections happen according to the schedule, they will occur at the most difficult point in negotiations with the European Union:
If we do not hold a general election now their political game-playing will continue, and the negotiations with the European Union will reach their most difficult stage in the run-up to the next scheduled election.
GBP/USD surged 1.3% from 1.2561 to 1.2718 as of 13:14 GMT today, trading near the highest level since December 6. EUR/GBP was up from 0.8464 to 0.8512 intraday but backed off to trade at 0.8403 — the lowest since December 21. GBP/JPY climbed from 136.76 to 138.32, bouncing from the daily low of 136.13.
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