* Yet, the pound isn’t expected to slide as a Conservative victory will still likely mean investors would wait for the Brexit negotiations to start for a better sense of how to trade the currency.
* The definition of what a small majority is also differs from analyst to analyst The pound is seen at $1.3025, not far from current levels.
Hung Parliament
* This could be particularly damaging for the pound as it throws not only the future of the government in question but could also complicate and possibly delay the start of Brexit negotiations.
* The range of forecasts is the widest under this scenario with RBC’s Cole seeing the pound falling to as low as $1.20.
* The median signaled a drop to $1.2350 With all the risks of a hung parliament, “being underweight the pound makes sense,” says Andrew Balls, chief investment officer at Pimco.
Labour Party Win
• A Labour win will hurt the pound in the short term, but could boost it further down the line as markets welcome the prospect of a softer Brexit and a boost to fiscal spending.
• “I think once the dust settles, the market will not see Labour as such a bad result,” said Jordan Rochester, a foreign-exchange strategist in London at Nomura Holdings Plc.
• While an outright Labour win seems unlikely, a coalition with the Scottish National Party or the Liberal Democrats is considered possible.
• The median projection was $1.2484, which is slightly higher than the prediction for a hung-parliament scenario.
• The forecasts ranged from $1.33 to $1.23, with analysts divided on whether the prospect of a soft Brexit under a Labour government will support the pound or the ensuing uncertainty weigh on it.
The following banks’ forecasts were included in the survey: ABN Amro, BNY Mellon, CBA, CIBC, Mizuho Bank, MUFG, Nomura, Rabobank, Royal Bank of Canada, Saxo Bank and SEB AB.