Saudi Press

Saudi Arabia and the world
Thursday, Oct 02, 2025

Pound climbs to six-month highs vs. euro as Conservatives get Brexit Party boost

Pound climbs to six-month highs vs. euro as Conservatives get Brexit Party boost

The pound jumped on Monday, hitting a six-month high versus the euro and posted its biggest daily rise in nearly a month against the greenback after the Brexit Party said it would not contest previously Conservative held seats in the UK’s election.
In a significant boost for Prime Minister Boris Johnson ahead of the Dec. 12 election, Brexit Party leader Nigel Farage said he did not want anti-Brexit parties to win, so was standing down candidates in seats won by the Conservatives in 2017.

The pound rallied 1% to as much as $1.2896 on the news, before easing to stand up 0.8% on the day at $1.2875, its biggest daily rise against the greenback since mid-October, according to Refinitiv data.

Versus the euro, the pound strengthened to its highest in six months, at 85.62 pence.

“The Tories will be heaving a sigh of relief and it also reduces at the margin the prospect of a hung parliament,” said Neil Mellor, FX strategist at BNY Mellon.

“The market has shown a tendency of being supportive of a clear result,” he said.

Mellor said the pound’s positive reaction implied markets have been more cautious because they were taking into account the possibility of a Labour victory.

“The Tories (Conservatives) are also seen as more market-friendly than Labour,” he said.

Lee Hardman, a strategist at MUFG said that, if the Brexit Party stood down candidates, it could clear the way for the Conservatives to pass their Brexit withdrawal deal.

A Conservative majority would allow the pound to rise 3%, a Reuters poll found and bookies now say a Tory majority is the odds-on favourite outcome of the election.

British government bond prices fell as Farage spoke and were down about 30 ticks from before the announcement. The FTSE 100 extended losses, down 1.2%.

The pound had risen above $1.28 before Farage’s announcement, after data showed the UK economy dodged recession in the third quarter of 2019, expanding 0.3%.

The GDP figures came after data showed British employers’ hiring plans have risen from an 18-month low, an unusually upbeat sign for the labour market.

Analysts noted, however, that the economy had actually contracted in August and September when risks of a no-deal Brexit were high and that the outcome of the election would dictate the pound’s path along with trade talks with the EU after the Jan. 31 Brexit date.

Annual gross domestic product growth fell to 1.0% in the third quarter, weaker than the euro zone’s 1.1% and well below the 2% rate Britain enjoyed before the 2016 referendum.

Latest positioning data also showed speculators had trimmed bets against the pound in the week to Nov. 5. Net short positions versus the dollar are now at $2.338 billion, a 5-1/2 month low, according to CFTC futures data on Refinitiv.

The net short position means the pound has more potential to appreciate on good news than to depreciate on bad news.

Sterling-dollar implied volatility gauges with one-month maturities - expiring just before the Dec. 12 election - fell slightly, but were still up from the three-month lows hit last week.
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
UK, Canada, and Australia Officially Recognise Palestine in Historic Shift
New Eye Drops Show Promise in Replacing Reading Glasses for Presbyopia
Dubai Property Boom Shows Strain as Flippers Get Buyer’s Remorse
Top AI Researchers Are Heading Back to China as U.S. Struggles to Keep Pace
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
UAE-US Stargate Project Poised to Make Abu Dhabi a Global AI Powerhouse
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Kuwait opens bidding for construction of three cities to ease housing crunch.
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
Could AI Nursing Robots Help Healthcare Staffing Shortages?
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Did the Houthis disrupt the internet in the Middle East? Submarine cables cut in the Red Sea
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Tether Expands into Gold Sector with Profit-Driven Diversification
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
Israeli Airstrike in Yemen Kills Houthi Prime Minister
After the Shock of Defeat, Iranians Yearn for Change
YouTube Altered Content by Artificial Intelligence – Without Permission
Iran Faces Escalating Water Crisis as Protests Spread
More Than Half a Million Evacuated as Typhoon Kajiki Heads for Vietnam
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
×