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Brexit Briefing: Most Accurate Election Poll Predicts Conservative Majority, GBP/USD Rises

Brexit Briefing: Most Accurate Election Poll Predicts Conservative Majority, GBP/USD Rises

Justin McQueen, Strategist

UK Election Analysis and Talking Points

  • Most Accurate Election Poll Expects Conservative Majority
  • Conservative Majority Would Propel GBP/USD Higher

BREXIT TIMELINE

Most Accurate Election Poll Expects Conservative Majority

Overnight, the long-awaited YouGov MRP Poll highlighted that the Conservative Party are on course for a big majority, which in turn saw GBP/USD break above 1.2900 and hit a high of 1.2950. The model had correctly called 93% of seats at the 2017 election, making it the most accurate poll, consequently, greater emphasis has been placed on this poll.

However, we must be cognizant of the fact that prior to this election, the poll has only been used at the 2017 election (making it 1/1), which had been released days before the election as opposed to two weeks before.

MRP Poll Results

  • Conservative Party: 359 (+42 seats)
  • Labour Party: 211 (-51 seats)
Brexit Briefing: Most Accurate Election Poll Predicts Conservative Majority, GBP/USD Rises

Conservative Majority Would Propel GBP/USD Higher

A similar outcome in the election as shown by the MRP Poll would likely see GBP/USD soar towards 1.3300, given that Boris Johnson would be able to pass his Brexit deal with relative ease, thus breaking the Brexit deadlock and the cloud of uncertainty that has gripped the UK economy. As it stands, GBP/USD implied volatility for the general election is at 45%, which in turn signals a 310pip break-even.

Brexit Briefing: Most Accurate Election Poll Predicts Conservative Majority, GBP/USD Rises

Source: CME

GBP/USD Price Chart: Daily Time Frame (Feb 2019 – Nov 2019)

Brexit Briefing: Most Accurate Election Poll Predicts Conservative Majority, GBP/USD Rises

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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