Sterling held just below $1.30 on Friday ahead of Nigel Farage’s Brexit Party press conference where local media said he was expected to put forward fewer candidates for the general election on Dec. 12, a move that could boost the pound.

Investors fear that a full field of Brexit Party candidates could win over pro-Brexit voters from the ruling Conservatives and thereby boost the leftist Labour Party, analysts said. Farage has dismissed reports that his party will pull candidates to avoid damaging the Conservatives as “idle speculation”.

“We’ll be watching the Brexit Party announcement with some interest,” said Jeremy Stretch, Head of G10 FX Strategy at CIBC Capital Markets.

Against a weaker dollar, the pound was up 0.1% at $1.2948. Versus the euro, sterling traded flat at 86.13 pence.

Farage is expected to speak at 0930 GMT.

“Downside risks for sterling result mainly from a strong election result for Nigel Farage’s Brexit Party, which from the point of view of most market participants would increase the risk of a no-deal Brexit,” Commerzbank’s Thu Lan Nguyen wrote in a note to clients.

After seeing his Brexit deal with the European Union held up by parliament, scuttling his vow to deliver Brexit by Oct. 31, Prime Minister Boris Johnson called the Dec. 12 election to break what he casts as political paralysis thwarting Britain’s departure and undermining confidence in the economy.

October was the pound’s best month in over a decade, as the currency rallied in the build-up to the mid-month European Union summit at which a new Brexit deal was agreed.

Some of these gains were lost when Johnson subsequently failed to secure his deal’s ratification in parliament. But the EU decision to extend the Brexit deadline to Jan. 31 kept the pound strong as the risk of a no-deal exit on Oct. 31 subsided.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.