Kiwi sinks vs pound as exit poll predicts a strong Boris Johnson majority

Exit polls have predicted a large majority for Boris Johnson's Conservatives. Photo / AP

The New Zealand dollar dropped by almost a penny against the British pound after UK exit polls predicted a large majority for Boris Johnson's Conservatives.

The kiwi was trading at 49.16 British pence at 11:13am in Wellington from 50.10 pence just prior to the release of the polls.

An exit poll conducted by Ipsos MORI on behalf of Sky News, the BBC and ITV News - forecast the Tories will win 368 seats, with Labour on 191 seats.

To form a majority government a party needs to win more than 325 seats in the parliament.

If the poll is correct it will put the UK on course to the leave the European Union at the end of January.

Kiwibank trader Mike Shirley said there's a lot of talk about whether Brexit is a good idea or not, but "the market doesn't care. The market cares about certainty and this offers a big fat dollop of it, just in time for Christmas. It's a pound positive story."

Official results will begin rolling in over the next few hours.

Shirley also noted the kiwi is rallying against the US dollar, rising above 66 US cents for the first time since early August. The kiwi recently traded at 66.14 US cents versus 65.80 cents at 8am as risk sentiment improved on news that US President Donald Trump signed off on a limited trade agreement with China.

A source briefed on the trade talks told Reuters earlier that the United States had reached a "deal in principle" with Beijing to resolve a 17-month-old trade war.