The pound reached a two-week high versus the euro just 21 days before Scotland votes on whether to become independent from the U.K., showing investors are disregarding concern the decision will harm Britain’s currency.
A measure of anticipated volatility in the pound fell during the past month even as the currency figured at the center of debate over Scotland remaining in its 307-year-old union with England. All three main U.K. political parties have said a newly independent nation wouldn’t be able to use sterling. Scottish nationalists dismiss that as bluff.
“I would not put the referendum out there as an issue that’s going to break the upward move in the pound,” said Steve Barrow, head of G-10 strategy at Standard Bank Plc in London. “Sterling will get stronger against the euro and yen.”