Currency Note Sterling

Worries over a ‘YES’ vote sees Sterling slump

By Ricky Bean September 12th, 2014

A mixed week for sterling has seen its fortunes change in response to the results of a number of polls released regarding the Scottish vote on independence. The week started with a the release of a poll showing that the “Yes” vote was pulling ahead, which saw sterling fall sharply across the board amid fears of the repercussions this would have on the UK economy as a whole. Sterling was able to recover some lost ground later in the week as further polls indicated that the “No” vote had extended its lead, and Bank of England (BoE) Governor Mark Carney spoke out about some of the dangers of a ‘YES’ vote. He also indicated that the BoE has seen signs that we are nearing the time where interest rates must increase, reassure investors who may have grown cautious following recent poor economic data and fears over Scottish Independence.

With the latest poll not expected until 17th September, we can expect to see most market movement today driven by economic data. Sterling heads into Friday holding close to its recent multi-year highs against the euro, and rallying against the US dollar following an increase in unemployment claims from the US on Thursday. Today sees the release of retail sales and consumer sentiment data from the US, which provide a key indicator of economic performance, and could affect sterling strength.