The British pound is holding on to its gains, adding two percent last Friday against the US dollar after the UK election victory by the Conservative Party.

The pound firmed on the back of the exit poll, trading up at 1.3500, the upper end of the bullish target.

Axi Trader Asia-Pacific market strategist Stephen Innes said the “Tory Glory” signals the removal of political uncertainty and quashes any near-term political risk premium that has been embedded in the currency regarding a Brexit withdrawal agreement.

“As the forex market now returns its focus on the economic data, any marginal improvement for the UK economy will be seen as exceptionally favourable for the pound, which could continue to climb above 1.4000 into the first quarter of 2020,” he told Bernama.

The pound is expected to move within the 1.3400 -1.3500 level next week.

Another factor leading to a firmer pound is that the currency can now be viewed as a very liquid haven proxy when US-China tensions re-escalate when the meatier phase two part of the trade deal gets ironed out.

“And for good measure, US President Donald Trump chimed in saying the US and UK are now free to strike a trade deal after the Brexit process,” he said.

Meanwhile, Britain’s plans to leave the European Union (EU) will happen as Prime Minister Boris Johnson, in victory celebrations last Friday, said he could now ratify the Brexit deal with the EU on Jan 31, 2020 - 10 months later than initially planned.

“We will get Brexit done on time on Jan 31 - no ifs, no buts, no maybes,” he said.

Innes said it is a resounding victory for Johnson, who will be able to pass the Withdrawal Agreement legislation and now has the flexibility to shape a more constructive future relationship with the EU in 2020.

“The likely UK process now - Johnson aims to present the Withdrawal Bill to the House of Commons next Friday. Then a pause for a couple of weeks. Early January sees the rest of the Brexit legislation passed, with the exit occurring on Jan 31, 2020,” he said.

The Conservative Party won after securing 365 seats with a majority of 80, collecting 43.6 percent of the popular vote against Labour’s 32.2 percent.

The party’s victory was its biggest since Margaret Thatcher’s in 1987.

- Bernama