The euro has been above 80p since the Brexit vote, and traded in a range of 85p to 90p most of that time. It also held its ground at 84.37 pence per euro. After touching an nearly three-year low in early September, it has recovered on expectations that Johnson's gamble to call an election could result in a majority that would allow him to push his Brexit deal through Parliament.
"The fact that there also won't be a hung parliament has given support to equities".
On top of this, rising hopes that the United States could delay upcoming trade tariffs on China kept the trade-correlated "Aussie" supported. Despite overbought conditions on many timeframes, sterling may extend its gains in the short and long terms.
At 7 a.m. on Friday, the pound was up 2.1 per cent against the dollar to 1.345 and up 1.29 per cent against the euro, nudging close to 12-month and 31-month highs respectively, having hit and remained at the highs from within the first hour of the exit poll's release, reports the Daily Mail.
If the market was to break above the 1.35 handle, then it's an obvious bullish signal and should send this market towards the 1.38 level. The New Zealand dollar also jumped to NZ$0.6636 to reach the highest since July.
Investors favour the prospect of a market-friendly Conservative government that can push through a Brexit accord, with Johnson promising all of his lawmakers will back his deal. Again, there were concerns over Labour's plans to nationalise the industry.
The opposition Labour Party promised the public a second Brexit referendum.
The U.S. trade deal proposal includes an offer to suspend some of the next wave of tariffs on Chinese goods due on Sunday in exchange for China's buying more American farm goods.
A successful scaling back of trade tension would relieve one major headwind to economic growth, which suggests lower demand for the safe-haven yen.
Britain's 10-year gilt yield also jumped to a six-month peak of 0.895% and was last up 3 basis points at 0.86%.
But Brexit is far from over and the pound faces more volatility in 2020 as Johnson confronts the tough task of negotiating a future trade agreement with the European Union, possibly in just 11 months.
On top of that, the three-month sterling implied volatility gauges, which include the January 31 Brexit deadline, have fallen to a five-month high of 7.13 vol, suggesting traders have removed protection against unexpected moves in sterling.
Though the pound had gained throughout the course of the election campaign - mainly because traders were optimistic about a Conservative win - the post-election movements in the value of the currency bring it far above the levels it had seen in recent weeks. The trade talks could prove even more complicated than the process of negotiating Britain's exit from the bloc, raising the risk of fresh market volatility down the line.
The dollar weakened because risks around Brexit and the trade war had dissipated, said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets. "I would still be wary of chasing the pound higher at these levels though".