UK pound sharply extends gains in abrupt move

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The UK pound abruptly surged, heightening already steep gains on the day, in mid-afternoon trading in New York.

Sterling shot as high as $1.2905 at 1:39pm ET, from $1.2779 just moments earlier. By pixel time, it has moved lower to $1.2828. At its highs of the day, it had gained 2.71 per cent on the buck, according to Bloomberg data.

Win Thin, a currency strategist at Brown Brothers Harriman, said the sudden inexplicable movement could have been due to a big trade being pushed through in twitchy, low liquidity markets, with most UK sterling traders off their desks. “It’s nervousness and positioning,” he said.

The currency had been trading higher all day after Prime Minister Theresa May called for snap elections that are scheduled to take place over the summer. Some currencies strategists noted that the move could offer the pound further bullish momentum, since it could help solidify Mrs May’s control over Brexit negotiations.

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