UPDATE 3-Pound whipsawed after Johnson calls for UK election

* Pound down 0.46% vs dollar and euro
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv

(Adds analyst quote; updates prices)
By Kate Duguid and Tommy Wilkes
NEW YORK/LONDON, Oct 24 (Reuters) - The British pound
boomeranged on Thursday following Prime Minister Boris Johnson's
call for a national election, plunging then recouping some
losses to land just under half a percent lower on the day
against the dollar.
Johnson said he was asking parliament to approve a national
election on Dec. 12 in an effort to break the political deadlock
over Brexit and ensure the UK leaves the European Union. In a
letter to opposition Labour leader Jeremy Corbyn, the prime
minister said he would give parliament more time to approve his
Brexit deal but that lawmakers must back a December
election. Although uncertainty about Brexit has hurt the pound, the
currency has been bolstered in October as the chances of a
no-deal exit have been all but eliminated. It was against that
backdrop the pound retraced its initial losses after Johnson
announced his third attempt to force a snap poll. The pound
GBP= was last down 0.46% to $1.286. It is currently up nearly
5% this month.
Having surged to a 5-1/2-month high on Monday, sterling fell
after British lawmakers blocked Johnson's plan to push through a
withdrawal agreement and get the UK out of the EU on Oct. 31.
"Is the election positive for GBP? I argue no. The campaign
will see polling swings, and investor inflows may slow whilst
they wait for the result. It's why we are long EUR/GBP," Nomura
analysts told clients.
The Brexit end game is more uncertain than traders thought
last week, setting up the pound for another rocky period.
Against the euro it dropped 0.24% to 86.37 pence per euro
EURGBP= .
In the UK, data this week showed the government was likely
to miss a goal of keeping borrowing below the threshold of 2% of
GDP, reflecting weakening public finances even before Brexit.
The Brexit optimism had led money markets to slash the
chances of interest rate cuts next year but those estimates are
creeping higher again, with a cut now 90% priced for December
2020, up from 60% a week ago BOEWATCH= .

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World FX rates in 2019 http://tmsnrt.rs/2egbfVh
Trade-weighted sterling since Brexit http://tmsnrt.rs/2hwV9Hv
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