London (BBN)-The pound rallied to its highest in over a week as exit polls in the UK election suggested that David Cameron would remain as prime minister.
Sterling jumped more than 1% over major currencies in Asian trade and as high as $1.5449 against the dollar, reports BBC.
The pound gained on the euro, which fell over 1% to a low of 72.73 pence – its lowest since the end of April.
If the exit poll is accurate, Mr Cameron will be able to remain as the head of a minority government.
The poll suggested Mr Cameron’s Conservatives were on track to get 316 MPs – just short of a majority, but better than expected.
That compares to 239 seats for the Labour party.
Analysts said the sterling jumped on the prospect of a stronger victory for the Conservatives because it meant the government’s agenda was likely to stay consistent.
The rise, however, may be short-lived as it increases the threat of a “Brexit” or Britain leaving the European Union – creating uncertainty for the economy and currency.
The country would head towards a EU membership referendum by 2017 as promised by Prime Minister David Cameron if he remains in power.