Foreign currency markets were shocked on Monday after United Kingdom P.M. Theresa May called for a snap general election in June, citing ongoing disagreements within Westminster regarding Brexit negotiations, “At this moment of enormous national significance there should be unity here in Westminster, but instead there is division.,” said May in her address.
"The country is coming together, but Westminster is not.,” she added.
In her speech, May laid the blame squarely on Jeremy Corbyn’s Labour Party, The Liberal Democrats and The Scottish National Party:
"In recent weeks Labour has threatened to vote against the deal we reach with the European Union. The Liberal Democrats have said they want to grind the business of government to a standstill.”Theresa May will need a two-thirds majority in the House of Commons tomorrow to schedule a general election for June 8th, 2017.
According to a poll conducted by British news outlet, The Telegraph, May’s Conservative Party received 62 percent support, with Labour getting 9 percent and The Liberal Democrats receiving 12 percent ; 5264 votes were cast in total.
In a separate poll conducted by The Telegraph, 24k out of 29.6k participants - approximately 82 percent - said they approved of May’s decision. And judging my the reaction of the currency markets today, it would seem that investors and market participants are in favor of a new election.
May’s announcement caused the British pound to surge more than 2.70 percent on Monday to a 6-month high.
Although the pound began trading on Monday morning around 1.25655 against the U.S. dollar, by 1:30 p.m. EST, the unexpected political developments in the UK had sent the GBP/USD exchange rate to its highest level since October 3rd of last year: 1.29074:
GBP notes photo by Images Money