Sterling traded with a firm bias on Thursday, showing few signs of jitters as Britons went to the polls to determine whether Prime Minister Tony Blair wins an historic third term in power. After two landslide victories in 1997 and 2001 opinion polls suggest the ruling Labour party will be returned to power with a comfortable 80 seat majority. Anything less than a convincing election win for Blair could weigh on sterling which has benefited from eight years of UK economic growth and political stability.
"Polls show a negligible risk of a hung parliament so sterling has traded in very tight ranges today," said Monica Fan global head of foreign exchange strategy at RBC Capital Markets in London.
In terms of the election outcome, she said a Labour majority of more than 140 seats was likely to boost sterling while anything less than 50 seats could knock the currency.
Sterling stood at $1.9042 and 67.92 pence per euro at 1510 GMT, up 0.15 percent against both currencies from the previous New York close.
Sterling has gained nearly four percent against the euro since the start of the year and remains not far from 12-year highs against the dollar.
News of a small blast in front of the British consulate in New York had no lasting impact on the pound as markets looked ahead to Friday's US jobs data and Monday's UK interest rate decision.
Two handmade grenades exploded in front of the Manhattan building shortly after polls opened in Britain, shattering windows but causing no casualties.
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