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Following years of market volatility under the Conservatives, the global currency market received much-needed reassurance when Keir Starmer’s centre-left Labour Party secured a substantial majority in the UK general election.
The British pound maintained most of its gains against the naira and held its ground against the haven currency.
Labour won over 326 of the 650 seats in parliament, with more than 410 seats predicted by an exit poll. Conservative Party Prime Minister Rishi Sunak conceded defeat.
Despite the pending announcement of more election results, Labour's victory had a positive impact on the currency market.
The Nigerian currency experienced a bearish trend against the British pound and other major currencies on both the official and underground markets, partly due to increased demand.
On the black market, the British pound sterling was sold for N1,905 against the naira, despite improvements in the official market conditions.
The pound displayed a 1% appreciation against the US dollar this week, marking its best weekly performance since mid-May. It also outperformed major currencies this year compared to the dollar, gaining more than 100 basis points.
The sterling was last seen at a $1.276 bandwidth at the London trading session, slightly below the three-week high of $1.27765 reached on Wednesday.
The UK election campaign saw stability in the British pound and UK bond yields, as markets believe that Labour will uphold the country’s budgetary stability.
Attention will now shift to Starmer’s first 100 days in office and his economic blueprint, which aims to improve the economy
