Tokyo - The British pound jumped on Friday after exit polls showed Prime Minister David Cameron's Conservatives were headed for victory, while the dollar won support on hopes for a solid US jobs report later in the day.
In Tokyo morning trade, sterling fetched $1.5441 against $1.5262 in New York, while the euro sank to 0.7296 pounds from 0.7382 pounds.
Exit polls indicated Cameron's Conservatives have defied expectations to win the most seats in Britain's general election while falling just short of the clear majority needed to govern alone.
“The Conservative Party are perceived to be more market-friendly than a Labour government and that's really at the core of the game,” said Sebastien Galy, a currency strategist at Societe Generale.
“Having said that, with a Conservative government, some people will reassess” their positions longer-term owing to the increased risk of Britain exiting the European Union, he added.
A Conservative-led government would mean Britain will press ahead with holding the EU membership referendum promised by Cameron by 2017.
“The market was expecting a messier, closer-run outcome in the exit poll,” said Daragh Maher, a foreign-exchange strategist at HSBC Holdings.
“Perhaps the market was a bit short pound into the poll expecting a tight call, and now that is being unwound,” he told Bloomberg News.
The centre-right Conservatives were projected to win 316 seats in the 650-seat House of Commons compared to 239 for Ed Miliband's centre-left Labour party, in a result that tore up pre-election predictions.
Opinion polls had indicated for months that the Conservatives and Labour were virtually tied.
In other trading, the dollar broadly rose, buying 119.93 yen, against 119.75 yen in New York late on Thursday.
The euro slipped to $1.1244 and 134.84 yen on Friday, down from $1.1266 and 134.91 yen in US trade.
On Thursday, the weekly US unemployment claims report came in strongly positive, with the moving average falling to a 15-year low.
Markets were geared up for the Labour Department's jobs report on Friday to gauge whether the economy is strong enough for the Federal Reserve to begin raising ultra-low interest rates, which would be a plus for the dollar.
AFP