The pound rose this week to a two-year (GUKG2) high versus the euro as Scotland voted to keep the U.K.’s 307-year-old union intact, dousing concern a separatist win would delay Bank of England plans to raise interest rates.
Sterling touched the highest in two weeks against the dollar yesterday after opponents of independence were declared winners with 55 percent of the vote in Thursday’s Scottish referendum, removing the risk to the currency from a splintering of the union. The pound dropped earlier this month as polls suggested the outcome was too close to call. U.K. government bonds declined, pushing two-year yields to a two-month high.
“The pound has strengthened modestly as investor concerns over the potential negative impact from Scotland leaving the U.K. eased,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “The U.K.’s relatively favorable cyclical economic momentum and outlook for tighter monetary policy should now resume as the main drivers of pound direction in the near term offering support for the pound.”
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Latest posts by marketpulsefxstaff (see all)
- Oil Remains Near Multi-Month Lows - 6 August 2015
- U.S. Dollar Higher on Recent Data - 6 August 2015
- Greece’s PM Tsipras: Loan Deal with Lenders Close - 6 August 2015