- Sterling has rallied by 10% since early September.
- Markets seem to have priced in a Conservative victory.
- Investors are hedged for an unexpected election outcome.
GBP/USD is solidly bid at nine-month highs above 1.3220 on the UK election day.
Britons will vote on Thursday in an election that will make the way for Brexit under Prime Minister Boris Johnson or push Britain toward another referendum that could lead to a reversal of the 2016 Brexit vote.
Markets priced in Johnson's victory
Sterling is currently reporting a 10.5 percent gain on the low of 1.1958 registered in early September.
A major part of the rally has been fueled by opinion polls forecasting a strong victory for Prime Minister Boris Johnson's Conservative party.
Conservatives' lead over Labour has narrowed in the last 48 hours. So far, that has failed to apply brakes on the GBP rally.
Put simply, markets seem confident that Johnson will win a majority and appear to have priced in a Conservative victory.
Investors hedged for an unexpected outcome
The solid rally in the spot is accompanied by a surge in demand for the GBP/USD put options, as discussed on Wednesday.
It indicates the investors have hedged themselves for an unexpected outcome - a Labour victory or a hung parliament.
Polls open at 0700 GMT
Voting will begin at 0700 GMT and close at 2200 GMT when an exit poll will give the first indications of the result. Official results from the bulk of United Kingdom's 650 different constituencies begin to come in from 2300 GMT to 0500 GMT, according to Reuters.
Impact on GBP
British Pound will likely see a final leg higher during the Asian session on Friday if Prime Minister Johnson gets a majority as expected. Later, the British currency could see a "sell the fact" pullback. Sterling will take a beating on an expected outcome.
Technical levels
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