If U.K. Prime Minister Theresa May pulls off an election victory on Thursday, the pound will likely stage a rally, analysts at Macquarie said in a note on Thursday.

"Any preliminary count headline that suggests Prime Minister May is on course to expand her parliamentary majority should be a pound-positive," Macquarie analysts Nizam Idris, Gareth Berry and Teresa Lam said.

That's counter-intuitive, they noted, as May has "championed" a hard Brexit, but Macquarie said that's how the market has traded the pound (Exchange: GBP=) risks since April 18, when the snap election was called.

A hard exit from the European Union , or hard Brexit, would come if the U.K. fails to reach a deal with the continent and leaves the EU's lucrative single market, reverting to World Trade Organization (WTO) rules.

The pound has dropped from as high as $1.50 against the dollar just before the June 2016 vote to exit the European Union to as low as $1.1979. At 10:20 a.m. HK/SIN, the pound was fetching $1.2959. But Macquarie expected that any post-election pound rally could be short-lived.

"We think the sterling downtrend could resume within days though, as May's new cabinet is named and EU-U.K. negotiations get underway," Macquarie said.

But Macquarie noted it couldn't rule out a scenario for a hung parliament, which could weigh on the currency.

When May "reluctantly" called the June 8 snap election seven weeks ago, the Conservatives boasted a seemingly unassailable lead over the left-wing Labour. However, Labour leader Jeremy Corbyn has since soared into contention, putting May's election gamble to gain a stronger majority and Brexit-negotiation mandate in doubt.

While a vast majority of observers still expect May to emerge victorious on Thursday, a Survation poll published last weekend placed the prime minister's ruling right-wing Conservative Party ahead by just a single percentage point.

In a hung parliament, with no party taking a clear majority, the U.K. could be thrown into a political deadlock with less than two weeks before formal Brexit talks were due to begin on June 19.

Macquarie noted that the U.K.'s "first past the post" system has meant elections were hard to call as the popular vote map doesn't always match which seats were won and lost.

"There is a real risk that this general election could be used as a second referendum on the U.K.'s future relationship with the EU – a last gasp attempt to stop Brexit in its tracks," Macquarie said.