The Pound advanced to fresh multi-week highs against the Euro and US Dollar as the currency market reacted to a surprising announcement from UK Prime Minister Theresa May.
After May revealed her intention to hold a general election on June 8th, GBP/EUR jumped by over 0.8%, GBP/USD climbed by 1.3%, and both GBP/AUD and GBP/CAD strengthened by over 1.5%.
Despite previously asserting that an election wouldn’t be held until the next scheduled one in 2020, May announced that it was the only way of overcoming the current divisions in Westminster and making a success of Brexit.
May stated; ‘Our opponents believe because the government’s majority is so small, that our resolve will weaken and that they can force us to change course. They are wrong. They underestimate our determination to get the job done and I am not prepared to let them endanger the security of millions of working people across the country.
Because what they are doing jeopardises the work we must do to prepare for Brexit at home and it weakens the government’s negotiating position in Europe.
If we do not hold a general election now their political game-playing will continue, and the negotiations with the European Union will reach their most difficult stage in the run-up to the next scheduled election.’
Although the Pound dropped ahead of May’s speech, GBP exchange rates swiftly rebounded and remain well up on the day’s opening levels.