GBP/NZD: Reporting biggest single-day gain in three years
- GBP/NZD is solidly bid with exit polls forecasting a big win for Tory party in the UK elections.
- Markets were expecting PM Johnson to score a big win.
GBP/NZD is eyeing the biggest single-day gain in over three years.
The pair is currently trading at 2.0362, representing a 2.09% gain on the day. That is the biggest daily rise since Nov. 10, 2016. On that day, the pair had gained 2.14%.
Pound picked up a strong bid in early Asia after the exit polls of the UK elections predicted a landslide victory for the incumbent Prime Minister Boris Johnson. As per the latest reports, Johnson's Tory party is likely heading for the biggest election win since Margaret Thatcher.
A decisive Tory victory will clear the way for Johnson to take Britain out of the European Union (EU) on Jan. 31. It would also clear the way for the party to make good on its pledge to quickly name the next Bank of England governor, according to Bloomberg's Brexit editor Edward Evans.
That said, currency markets seem to have priced in a Tory victory. The GBP/USD pair has rallied by more than 1,000 pips in the last two months.
Hence, a "sell the fact" pullback cannot be ruled out following the official confirmation of Tory party victory. In that case, GBP/NZD will end the day with lesser gains.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
