Sterling traded flat on Tuesday after a new poll reinforced expectations the Conservative Party will win a parliamentary majority in Britain's election next month.

Prime Minister Boris Johnson's Tories have surged to an 18-point lead over the opposition Labour Party, according to an opinion poll published by market research company Kantar on Tuesday.

If the Conservatives win a majority on Dec. 12, expectations are the House of Commons would approve the Brexit deal agreed with Brussels last month and Britain would exit the European Union on Jan. 31, ending three-and-a-half years of uncertainty.

Brexit Party leader Nigel Farage said on Tuesday that will probably win the election with a small majority. Much of the expectations of a Tory win are already priced into the pound, HSBC strategists told Reuters.

By 15:20 GMT, sterling was trading flat at 85.50 pence against the euro, close to the six-month high of 85.22 pence reached on Monday. It was also flat against the dollar at $1.2948. Sterling has climbed from $1.20 early in September to near $1.30 on Monday as hedge funds reduced their short positions on the currency.

Source : Reuters