Sterling held gains in early Asian trade on Tuesday, having hit a six-month high versus the euro and rising as much as 1% against the dollar overnight, as the prospect of a hung parliament in UK elections eased slightly.

The pound rallied to as high as $1.2896 on the news, which the market had interpreted as reducing the probability of a hung- or Labour led- government. The currency later eased to $1.2858.

Against the euro, the sterling strengthened to its highest level since May 8, at 85.62 pence.

The pound had already risen above $1.28 before Farage’s announcement, after data showed the UK economy had narrowly missed a recession in the third quarter of 2019, expanding 0.3%.

The euro last changed hands at $1.1034, while the greenback last traded at 109.12 yen, both little changed on the day.

Source: reuters