Pound hits 31-month high as traders predict Conservative majority
The value of the pound rose to a 31-month high against the euro amid confidence from traders that the Conservative party can secure a working majority in Thursday’s General Election.
However, the London markets were subdued throughout the trading session, slipping slightly lower on the back of global trade tensions.
The value of the pound increased 0.14% versus the US dollar at 1.315 and rose 0.05% against the euro at 1.188.
Connor Campbell, financial analyst at Spreadex, said: “Sterling now just wants Brexit done, a telling about-face considering the plunge it suffered following 2016’s referendum result, which means the Tories are its favoured party.
“Its current levels suggest it is confident of a blue majority come Friday morning.
“It also leaves the currency with plenty of room to fall if Britain produces the latest in a string of electoral upsets.”
The FTSE 100 was much more subdued as traders remain pensive over US-China trade tensions.
London’s top flight closed 5.76 points lower at 7,233.9 at the end of trading on Monday.
David Madden, market analyst at CMC Markets UK, said: “Heading into the close, European equity markets were mixed as there had been an absence of major macroeconomic news.
“The next few days will be critical for the situation as the US still have plans to impose tariffs on more than 150 billion dollars-worth of Chinese imports.”
Elsewhere in Europe, the major markets both drifted into the red ahead of the final Federal reserve statement of the year on Wednesday.
The German Dax decreased by 0.46% while the French Cac edged 0.59% lower.
Across the Atlantic, the Dow Jones dipped lower as the positivity from Friday’s strong jobs figures subsided.
In company news, Tesco led the FTSE 100 risers on Monday after investors salivated over the potential sale of its Asian division.
City insiders said the division would be worth as much as £7.2 billion after the grocer said it has been approached by a potential buyer and has commenced a “review of the strategic options” for the business in Thailand and Malaysia.
Shares in Tesco jumped by 10.8p to 243.1p after the announcement.
Subprime lender Amigo saw shares rise higher after its boss stepped down after less than five months at the helm of the firm.
Chief executive Hamish Paton resigned from the company alongside chairman Stephan Wilcke after Amigo continued to flounder amid regulatory pressure.
Shares in the company increase by 6.2p to 66.8p on Monday.
Elsewhere, shares in Tullow Oil tanked on dismal update for the oil exploration business.
Tullow shares hit an all-time low after it reduced its production guidance, scrapped its dividend and announced the immediate departure of its chief executive.
Tullow shares dived by 101.4p to 39.94p at the close of play.
The price of oil dipped slightly on Monday after an unexpected fall in Chinese exports.
The price of a barrel of Brent crude oil slid by 0.26% to 64.14 US dollars.
The biggest risers on the FTSE 100 were Tesco, up 10.8p at 243.1p, Aviva, up 6.5p at 404.4p, Sainsbury’s, up 3.5p at 223.5p, and Severn Trent, up 31p at 2,280p.
The biggest fallers on the index were Phoenix Group, down 27.1p at 713.7p, Rentokil, down 10.6p at 429.8p, Tui, down 20.2p at 957.8p, and Melrose, down 4p at 227.8p.