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Pound jumps as exit poll shows Conservative majority in British vote

AFP  |  New York 

The pound sterling leapt higher on Thursday after exit polls showed Prime Minister Boris Johnson's ruling Conservative Party on track to win a wide parliamentary majority, a result seen as hastening Brexit.

Meanwhile, global stock markets rallied with Wall Street in record territory following reports Washington and Beijing had at long last sealed a partial trade deal and agreed to de-escalate their tariff battles.

The British exit poll suggested the Conservatives would win 368 seats in the 650-seat parliament, with the main opposition Labour party trailing on 191.

Shortly after 2200 GMT, a pound rose about two per cent against the dollar USD 1.3416 and was up 1.6 per cent against the euro at 83.25 pence.

"It gives Johnson the mandate to push over the Brexit," said Shaun Osborne, chief currency strategist at Scotiabank.

"For the UK it provides some clarity for the economy."

Meanwhile in New York, stocks forged into record territory after media reports indicated President Donald Trump would call off steep tariffs planned for Sunday and slash duties already in place on Chinese goods.

The S&P 500 and Nasdaq both set new records.

"Getting VERY close to a BIG DEAL with China. They want it, and so do we!" Trump tweeted early in the day, giving stocks a lift.

But Karl Haeling of LBBW told AFP the devil was in the details as negotiation breakthroughs had appeared to fall apart before.

"We've been down this road before," he said.

The ECB, meanwhile, gave markets little to trade on as Christine Lagarde chaired her first monetary policy council meeting and held her conference in her new post.

The bank left interest rates unchanged and a maintained its massive bond-buying program, as expected.

ECB economists also came up with figures suggesting both an uptick in inflation and "signs of stabilisation in the growth slowdown," which provided the euro with some tailwind.

Lagarde said she would develop her own style and claimed to be neither dovish nor hawkish but aimed to be a "wise owl." Still, Lagarde "came off as slightly hawkish," OANDA analyst Edward Moya said.

"Lagarde seems poised to help take the eurozone out of negative rates."

Asian equity markets mostly closed higher after the Federal Reserve on Wednesday indicated it was unlikely to change US interest rates throughout next year.

The US central bank, which cut the key borrowing rate three times this year, said after a two-day meeting it would hold them for now and set its sights on low inflation and the global economy.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, December 13 2019. 04:55 IST