Boris Johnson won the British vote on Thursday by a vast majority, sending the pound soaring higher as traders (and British citizens) braced themselves for a quick Brexit.
The pound was up 2.35 percent against the U.S. dollar as of 2:42 p.m. HK/SIN, trading at $1.3472. The sterling hit a high of $1.3516, its highest level since May 2018, before retreating slightly. The euro was also trading significantly lower against the pound, falling 1.92 percent to 0.8289. The common currency did, however, rise against the dollar, trading up 0.34 pecent to $1.1166.
Johnson has been the dominant political player in the United Kingdom since his last electoral victory only 20 weeks ago, and his tenure has been marred by chaos. Still, he crushed his opponents in yesterday’s election in a show that proved most Britons are eager to put the Brexit behind them. Johnson’s Conservative Party wone 368 seats, the biggest Conservative victory since Margaret Thatcher’s win in 1987.
Johnson has pledged to complete the Brexit by January 31, 2020, a goal which is both lofty and extremely difficult. Among the issue that remain open are how the U.K. will relate to other EU countries in the areas of trade and security, points that have been difficult to thrash out thus far. However, his electoral victory will give him freedom from parliamentary threats that have thus far blocked his efforts. Johnson will no longer be dependent on the votes of the European Research Group and the Democratic Unionist Party, which will give him the ability, if he so chooses, to pursue a softer Brexit.
In the meanwhile, the final hours are approaching before Sunday’s deadline for the trade deal between the United States and China, and while Washington has said that there is hope for a resolution, Beijing has remained silent on the issue.
Asian markets were broadly higher on Friday, with Japan’s Nikkei 225 surging 2.55 percent after struggling most of the week. The Shanghai Composite gained 1.68 percent, while the Shenzhen Composite gained 1.45 percent. Hong Kong’s Hang Seng Index was up 2.15 percent in the mid-afternoon in Asia, as traders embraced optimism about the U.K. election and hopes for a trade deal or some form of compromise that will protect the markets.