The British pound hit a fresh one-week high against the Norwegian krone. This happened after a much-anticipated poll suggested that Boris Johnson’s Conservative Party is on track to win a majority in the December elections.
According to the YouGov poll, which uses a much more precise calculation method than standard polls and predicted the 2017 election outcome, the Conservatives will win 359 of the 650 seats in the Parliament – a 68 seat majority and the best result of the Conservatives in more than three decades. Jeremy Corbyn’s Labour Party is set to win 211 seats.
After the poll was published, the pound strengthened significantly against other major currencies and hit an intraday high of 11.8673 against the krone during the Asian session. A majority of 68 seats would help Boris Johnson to deliver on his Brexit promises by avoiding a hung parliament, which is good news for the pound given the recent political uncertainty.
Of other parties, the Scottish National Party is set to win 43 seats, while the Liberal Democrats are on track to win 13 seats.
Markets will likely trade on low volatility in today’s trade as US trading desks are quiet before the Thanksgiving holiday. In addition, there are no major market reports scheduled for the pound and krone until next week.
From a technical standpoint, the pound is reaching an important resistance level against the krone in the 11.85-87 range, with the November 20 high of 11.8814 acting as the last barrier before we could see further strength.
The upper triangle line around the 11.90 level is the next target if the 11.88 level breaks, while the pair looks well supported to the downside by strong bullish momentum. As of 7:05 London time, the pair traded at 11.8633.