The U.K. pound continued to trade more than 2% after Prime Minister Boris Johnson's Conservative Party secured a majority in the House of Commons.
The pound jumped more than 2% in early trade after an exit poll projected an 86-seat majority for the Conservative Party in the U.K. general election.
Shortly after 10 p.m. London time, a survey of thousands of people who had just left the voting booth indicated that the Conservatives were on course to gain around 50 seats, ensuring a healthy majority.
In reaction the pound rose to $1.3451, more than 2% higher than before the poll was announced, and touched its highest level against the greenback since June 2018. Sterling also jumped against the euro, up 1.4% to 83.265 pence.
The British currency last traded at $1.3478 after touching an earlier high of $1.3514. Against the euro, it changed hands at 82.91 pence.
The exit poll by Ipsos Mori is commissioned by Sky News, the BBC and ITV and is generally considered more accurate than polls leading up to election day.
The Conservative Party is tipped to gain around 50 seats in the election, while Labour would lose 71 seats from its performance in 2017. In Scotland, the Scottish National Party is forecast to win as many as 55 seats, tightening its grip north of the border.
In a snap research note, Paul Dales, chief U.K. economist at Capital Economics, said the result, if accurate, would free the path for Prime Minister Boris Johnson to push through his Brexit plan.
"If the Conservatives do win a majority, passing a Brexit divorce deal in the coming weeks would remove any risk of a no-deal Brexit on 31st January, reduce the immediate uncertainty and lift business investment at least a bit," said Dales.
The analyst added that if a big majority over all other parties is realized then Johnson may now have the scope to "ignore the Brexiteers in his party and provide businesses with some certainty by quickly extending the transition period."
The transition period is currently scheduled to begin as soon as the Withdrawal Deal is passed through Parliament and Britain officially leaves the European Union. That is expected to happen at the end of January. As it stands, the U.K. and EU would then only have until December 2020 to negotiate their future relationship.
Markets had largely priced in a majority for Johnson's Conservative Party, with speculative sterling shorts significantly reduced in recent months.
Having fallen below $1.20 in early September after Johnson lost his working majority in Parliament, the pound had recovered around 10% of its value to trade above $1.32 as voters headed to the polls on Thursday, with a final YouGov poll suggesting a 28-seat majority for the ruling party.
The recovery began when Johnson agreed to a new Brexit deal with the EU on Oct. 17. Positive sterling moves ahead of the election suggested that markets were hoping for certainty in the event of a Conservative majority, which would mean Johnson could likely take the U.K. out of the bloc on that withdrawal agreement ahead of the Jan. 31 deadline.
The pound has yet to fully recover from the historic plunge suffered after the U.K.'s landmark vote to leave the EU on June 23, 2016. Before results began to emerge that night, cable had risen as high as $1.50 as traders banked on a vote to remain.
By the time the result became clear, it was down at just above $1.32, around the same level reached on Thursday morning as voters headed to the polls three and a half years later.