Analysis / Daily / Finance / forex

Sterling surges as Tories eye shock majority

One Pound
The pound has leapt almost 2% and the FTSE 100 is set to add over 100 points at the open as the general election result points to a surprise majority for the Conservatives. A dismal night for Labour and the Liberal Democrats began at 10pm when a BBC/ITV/Sky exit poll confounded all previous forecasts by suggesting the Conservatives would win more than 300 of the 650 seats in the House of Commons. That prompted a 1% rise for the pound against the dollar, and sterling built on those gains this morning as it emerged the poll had perhaps understated the Tories’ performance. By early morning the pound was trading 1.8% higher against the dollar at $1.55, as it became clear that David Cameron is on the verge of winning a second term as prime minister. Sterling also moved some 2.3% higher against the euro – its largest gain since 2009 – to 1.3840.

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Greece is rehiring thousands of public sector workers, including cleaning ladies, despite sustained pressure from its international creditors. Greek MPs passed a law to give back jobs to some 4,000 workers who were laid off under severe austerity cuts. It comes as Athens seeks a deal on more financial aid ahead of a meeting of eurozone finance ministers on Monday. Greece is running out of money as it has to pay €750m to the International Monetary Fund on 12 May. International creditors have demanded cuts in spending, including plans to trim the civil service and privatisation of state assets, in order for Greece to continue receiving loans.

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The dollar was higher against the yen and the euro in Asia trade Friday on hopes for  a strong reading in closely-watched U.S. jobs data, while the British pound extended its earlier gains against rival currencies as fears of political instability in the U.K. subsided. Investors avoided taking lopsided positions amid a mixture of expectation and anxiety ahead of U.S. jobs data later Friday. But weekly initial jobless claims overnight in the U.S. were strong enough to keep alive expectations for upbeat numbers in the April nonfarm payrolls report, in what may show a rebound from disappointing reading a month ago

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