The British pound soared on Tuesday, climbing more than 1% after U.K. Prime Minister Theresa May unexpectedly called for an early general election that she says is necessary to strengthen Brexit negotiations.

The prime minister announced plans for an early general election on June 8.

“The election should hand Theresa May a much bigger mandate to stand up to the harder line, anti-EU backbenchers which currently hold a disproportionate sway over her party’s stance on Brexit. That would be welcomed by financial markets,” said Luke Bartholomew, investment manager at Aberdeen Asset Management.

The pound GBPUSD, -0.00% hit $1.2763 as details emerged, up 1.6% from the $1.2565 level it traded at late Monday. The spike took the currency to its highest level since December.

The pound swung in a wide range, hitting a low of $1.2515 earlier in the session. Against the euro, the pound GBPEUR, +0.07% traded at €1.1928 from €1.1805 late Monday; it had dropped to €1.1748.

“We want a deep and special partnership between a strong and successful European Union and a United Kingdom that is free to chart its own way in the world,” May said. “Our opponents believe that because the government’s majority is so small, our resolve will weaken and that they can force us to change course. They are wrong,” she added.

May’s Conservative party currently has a parliamentary majority of 17. Since taking office last summer, the prime minister has consistently ruled out a snap election. As recently as last month, her office said an early vote was off the table and there wasn’t going to be an election until the planned ballot in 2020.

The dollar, meanwhile, slipped against leading rivals, with the pound the main driver behind the losses. The ICE U.S. Dollar Index DXY, -0.06% , which compares the dollar to six currencies, fell 0.5% to 99.74, falling under the level of 100 for the first time since late March. The WSJ Dollar index BUXX, -0.03% , which measures the buck against a wider basket of currencies, was down 0.3% at 89.78.

Dollar-yen USDJPY, -0.29% traded at ¥108.41 compared to ¥108.91 late Monday in New York. The euro EURUSD, -0.07% was buying $1.0699 compared to $1.0644 late Monday in New York.

The dollar wasn’t immediately impacted by the latest U.S. economic data. Housing starts fell 6.8% in March, dropping to a seasonally adjusted annual rate of 1.22 million that was lower than expected. Separately, heating demands from colder temperatures lifted industrial output in March though the report’s manufacturing measure was weaker.