The pound climbed to its highest levels in six weeks on Tuesday against the backdrop of broad-based dollar weakness and after a fresh poll showed the ruling Conservative Party widening its lead before next week's election.
Prime Minister Boris Johnson's Conservatives increased their lead slightly over Labour, the main opposition party, over the last week to 12 points, a survey by Kantar showed on Tuesday, ahead of a Dec. 12 election.
"The fresh poll results is pushing the pound higher with the dollar's weakness also playing a part," said Lee Hardman, a currency strategist at MUFG in London.
Against the dollar, the pound rose 0.33% to $1.2989 while it gained 0.3% versus the euro to 85.35 pence.
Sterling has gained more than 6% from a Sept. 3 low as markets cut the risks of a no-deal Brexit.
But gains have stalled in the past month as election uncertainty has risen, including the prospect of victory for the Labour Party which has pledged tax hikes for the wealthy and a swathe of nationalizations. Labour's policy on Brexit could also lead to more uncertainty. While Johnson wants to implement an exit deal he has already agreed with Brussels and leave the EU in January, Labour is promising to negotiate a new exit deal and put it to the public at a second referendum next year. (Reuters)