Sterling rises after election poll, yuan up on trade deal

 Sterling rises after election poll, yuan up on trade deal

By Stanley White

TOKYO (Reuters) - The pound rose to a three-and-a-half year high versus the euro and the highest in more than a year versus the dollar after exit polls suggested a win for the Conservatives, which should help ensure the UK's smooth exit from the European Union.

The Japanese yen fell and the Chinese yuan surged in offshore trade after Bloomberg News reported that U.S. President Donald Trump signed off on a trade deal with China that will delay a new round of tariffs scheduled for Dec. 15.

The early results suggest the election will relieve almost four years of uncertainty about when Brexit would take place, which should be supportive of the pound.

A successful scaling back of trade tension would relieve one major headwind to economic growth, which suggests lower demand for the safe-haven yen. Avoiding new tariffs should also be a boost to China's slowing economy, which should draw more investors to the yuan.

Against the euro, sterling rose around 2% to as high as 82.85 pence, its firmest level since July 2016. The pound surged by 1.9% to $1.3430, reaching the highest since May 2018.

Against the dollar, the yen fell to 109.50, the weakest since Dec. 2.

In the offshore market, the Chinese yuan traded at 6.9509 per dollar, after surging on Thursday to the highest since Aug. 1.

(Reporting by Stanley White; editing by Diane Craft)

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Updated Date: Dec 13, 2019 05:06:51 IST