YouGov, a polling company latest polls suggest that the Conservative party could fall short of an overall majority in the upcoming national election on June 8.
The currency market reacted with the pound falling half a percent in Asian trade to $1.2788, it also fell to 87.38 pence per euro.
The YouGov polls modelling suggests that of the 330 seats that the Conservatives hold in government, they may lose 20. While the Labour Party could gain 30 seats which could result in a hung parliament for the Tories.
Currency strategist with ING in London, Petr Krpata said that investment premise is fading, while the premise has been on a higher majority in the Tory government the sterling was in a value chasing position.
Meanwhile other pollsters are questioning the validity of the results.
Jim Messina, a Tory campaign aide has challenged the General Manager at YouGov, Ben Leet with a bet on Twitter saying “yet another stupid poll from YouGov, do you want to bet for charity? Jim Messina, who is reputed for masterminding the election victories of former President Barack Obama in the US.
ComRes market research pollster, Andrew Hawkins is also questioning the validity of the results. He said that the most likely outcome will be that the Conservatives will remain on track for a majority of a 100-plus, if the voters behave like they did in 2015.
The dollar index which measures the greenback against a basket of 6 major currencies gained 0.1 percent to 97.367. The dollar recouped losses from Tuesday against the yen and was up 0.1 percent at 110.90.
Data released on consumer spending for April in the US was up at its biggest increase in 4 months, while monthly inflation rebounded.
Investors are still wary whether Donald Trump can come through on his stimulus package for the economy together with his proposed tax cuts. They are concerned that the investigations over his ties with Russia will hamper his progress.
Eyes on Europe
Investors have turned their attention to the European Central Bank and the euro zone inflation data with any clues as to whether the economy in the Eurozone is improving.
The euro was trading at $1.183.
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