Pound expected to hit highest record in a decade due to Brexit optimism

The pound soared last Thursday and is anticipated to hit its biggest monthly rise in more than a decade as factors such as dollar underperformance and no-deal Brexit brought demand. 

While US Federal Reserve s interest rates cut-off scheme played a major role for pound s gains, the biggest factor that drove pound s upsurge was the progress on the Brexit deadlock.

UK Prime Minister Boris Johnson who fell short in fulfilling his attempt to leave the European Union on Oct. 31 pushes for an election on Dec. 12. Such plan followed after EU s decision to delay Brexit for the third time.

The Conservative Party leads with 8-point vote against opposition Labour Party as disclosed by survey poll conducted by the Daily Mail.

According to the latest forecasts, Morgan Stanley and Goldman Sachs minimized no-deal Brexit risks down to 5%. 75% was assigned to a possible agreement as the probability of Britain retaining in European Union covered 20%.

The pound soared to 0.3% at $1.2941 against the greenback, ending its session in a five-month high record above $1.30 last week. In line, it gained 0.2% against euro.

The pound is 5% firmer against the dollar this month as it is heading towards its biggest monthly rise since May 2009, according to Refinitiv records.

The Fed laid their policy rate flat to 1.50%-1.75% and dropped accountability in their released statement to  act as appropriate  to retain economic expansion.

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