After a difficult morning the pound has surged against the dollar, with the GBP/USD cross rising over one per cent to hit an intraday high of $1.2915.So what happened?
Overnight the pound dropped across the board after the latest poll from YouGov suggested we could see a hung parliament after next weeks UK election. Recent polls have shown the Labour party eating into the Conservatives lead, which stood at nearly 20 percentage points only one month ago.
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On the back of the report from YouGov markets started to panic and as the London trading session opened this morning the GBP/USD cross fell to $1.2774, the lowest we have seen the currency pair since the 18th April.
However, the pound started to rebound this afternoon after another poll was released and showed Theresa May was leading by ten percentage points, giving her party enough for a majority victory.
GBP/USD graph
What can we expect for GBP/USD over the next week?
The easy answer is more volatility. I am sure we are going to see polls released on a daily basis between now and the 8th June, and the results will cause the pounds value to fluctuate.
If the results of the polls continue to swing, it is likely we will see the pound come back under pressure, although if they all start to show a commanding lead for the Conservative party we could see the GBP/USD cross push back towards $1.30.
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