(Bloomberg) -- The pound fell in early Asia trading Wednesday as an update to an election poll which successfully predicted the 2017 election suggested U.K. Prime Minister Boris Johnson’s Conservative party is on track to win a smaller majority than previously projected.
Sterling weakened versus all of its Group-of-10 peers on the survey of voter intentions ahead of the Dec. 12 election. The market has been betting on a win for the Conservatives, seen as the more market-friendly option thanks to the party’s policies and Johnson’s pledge to take Britain out of the European Union by the end of January.
The YouGov poll shows the Tories on track to win 339 seats in the House of Commons, with Labour securing 231. That suggests that when smaller parties are included, it would leave a Conservative majority of 28. The previous iteration of the poll two weeks ago projected a majority of 68.
“Anything sub-340 will not be welcomed by the market,” according to a note from Jordan Rochester, an FX strategist at Nomura, in a note before the poll’s release.
The U.K. currency sank as much as 0.4% relative to Tuesday’s New York closing levels, to $1.3108 in early Asian trading Wednesday. It touched the strongest since March on Tuesday.
To contact the reporters on this story: Charlotte Ryan in London at cryan147@bloomberg.net;Vivien Lou Chen in San Francisco at vchen1@bloomberg.net
To contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Michael Hunter, Mark Tannenbaum
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