The pound held firm on Friday after exit polls indicated Keir Starmer's Labour party was set to win a massive majority in the UK general election, affording investors some much-needed certainty after years of market volatility under the Conservatives.

Centre-left Labour was on course to capture 410 of the 650 seats in parliament, giving the party a majority of 170 seats and bringing an end to 14 years of Conservative-led government.

Sterling barely budged after the release of the exit polls, and was last trading around $1.2758, steady on the day, showing little change on levels seen earlier on. The pound was also broadly unchanged against the euro , which was at 84.76 pence.

Sterling has edged up since Conservative Prime Minister Rishi Sunak called the election in late May, earlier than anticipated. It is the strongest-performing major currency against the dollar this year, with a gain of 1.2%.

On a trade-weighted basis , the pound is now back where it was in 2016, at the time of the Brexit vote, reflecting a belief among traders and investors that a period of intense market volatility, driven by political and economic tumult under the Conservatives, may be drawing to a close.

Source : Reuters