British pound soar with trade news and Torys landslide victory

On Thursday, the GBP soared to its highest since mid-2018 as Brexit polls results quickly wiped out any chance of shock win by the Labour Party- which had been a worry for the investors.

Boris Jonson, the U.K. prime minister, won a commanding majority in Britain's Parliament, giving him the power to deliver Brexit.

However, trade talks with the European Union may drag on for months.

The GBP rose 2.1% at $1.3450 and reached levels against the euro- highest since mid-2016.

The wave of trade euphoria had already lifted Wall Street to records highs.

Optimistic trade news

According to Reuters, the U.S. has agreed to reduce some tariffs on Chinese goods and delay the next round of tariffs as part of the phase one trade deal.

On the other hand, China has agreed to make $50 billion in agricultural purchases in 2020. Another source said.

"If the U.S. cuts the current tariffs to some extent as reported, that is not something markets have priced in so that we could see a further leg up," said Norihiro Fujito.

Norihiro Fujito is the chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

The dollar fared less well elsewhere, slipping 0.5% to 96.792 against a basket of currencies, as the pound and the euro both benefited from the U.K. election result.

The U.S. dollar hit an 18-week low against the yuan as any trade dispute would affect the export-heavy Chinese economy. 

The dollar traded at 6.9607 yuan after shedding 1.2% overnight.

"Risk appetite ran wild after Trump signaled that he made a deal with China and that will only be positive for global demand forecasts for crude," said Edward Moya, 

He is the senior market analyst at OANDA.

Interest rate futures dropped as investors priced in less chance of a rate cut from the Federal next year - a shift seen across a range of developed nations, including the U.K.

Other safe harbors also took a beating, with the yen dropping across the board. 

The dollar firmed further to 109.60 yen, having risen 0.7% overnight.