GBP/AUD is declining in early trading on Wednesday after YouGov showed that UK Prime Minister Boris Johnson’s Conservative Party would secure only a modest win in the election due tomorrow.
The pair is currently trading at 1.9255, down 0.31% as of 6:08 AM UTC. The price had rallied yesterday, and it’s about to waste those gains. In fact, the pair hit the highest level since June 2016 on Tuesday, with the pound being driven by Brexit optimism after a series of polls showed that Johnson was extending his lead.
However, on Tuesday evening, a YouGov poll concluded that the Tories would secure a 28-seat lead in the election, down from 68 two weeks ago. Such a result would not satisfy Johnson. YouGov said that the Prime Minister would fail to win a majority, which might extend the Brexit uncertainty.
Anthony Wells of YouGov said:
“Based on the model, we cannot rule out a hung parliament.”
Another market research company also presented its poll results yesterday, showing that the Conservatives are losing momentum. Focalpoint said that the PM would win a 24-seat majority, down from 82 seats that it predicted in November.
According to the YouGov poll, the Conservatives would win 339 out of 650 seats in the UK Parliament’s House of Commons. Elsewhere, Labours would secure 231 seats.
The YouGov poll is watched closely as it could successfully predict the result of the previous election in 2017. It uses a special model called multi-level regression and post-stratification (MRP), an approach that considers voters’ gender, age, and education, among other variables.
Johnson called the early election to break the Brexit deadlock, as the parliament would consistently oppose his plans to take the UK out of the bloc under his agreement with European leaders. However, if he doesn’t secure a comfortable win tomorrow, a “hung parliament” would have the most negative impact for the UK’s economy, analysts say.
Chris Curtis, YouGov’s political research manager, commented:
“The margins are extremely tight and small swings in a small number of seats, perhaps from tactical voting and a continuation of Labour’s recent upward trend, means we can’t currently rule out a hung parliament.”