Sterling slipped on Wednesday morning after the fresh polling data suggested a hung parliament. However, just a few hours later a separate poll published by research firm Panelbase showed the Conservative party held a 15 percentage point lead. As a result, the pound trimmed some of its losses to trade 0.1 percent lower against the dollar for the session.
"The near-term risks to sterling remain heavily tilted to the downside," Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, said in a research note on Tuesday.
"Sterling is about 2 percent higher than when the election was called suggesting markets remain positioned for a big Tory (Conservative party) win that - in theory - would strengthen May's hands in Brexit talks," Tombs added.
JPMorgan analysts suggested in a research note published Friday that sterling would most likely rise in the immediate aftermath of a Corbyn victory, whereas Nomura researchers argued it was more likely investors would sell the U.K. currency, leading to an immediate fall.
Yet strategists from both banks predicted a softer Brexit stance from Labour would ultimately be positive for sterling beyond the near term.
Labour's Corbyn has vowed to pursue a so-called softer approach towards Brexit, when compared to the Conservative party, as he has pledged to secure the benefits of the EU's single market – a tariff-free trading bloc for goods and services - and promised a more open immigration policy.
"The last two weeks have been traumatic for the Conservative campaign ... Attention has veered off Brexit after deeply unpopular education and social care plans were announced in the Conservative manifesto, while the Labour Party's own policy proposals appear to have been effective at attracting (center-left) Liberal Democrat voters," Deutsche Bank analysts, led by chief economist Mark Wall, said in a research note on Tuesday.