Pound Seen Tumbling Up to 10% on Scottish Yes Vote
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
The pound, already suffering its worst month in more than a year, has the potential to tumble 10 percent should the Scots vote for independence from the U.K., according to economists surveyed by Bloomberg.
A victory by Scottish First Minister Alex Salmond’s “yes” campaign would mean a 5 percent to 10 percent slide versus the dollar within a month, said 61 percent of the 31 respondents polled by Bloomberg Sept. 5-11. Sterling is already down 5.5 percent from a five-year high in July, and touched its lowest level in 10 months this week as momentum for the separatists increased.
“The question is if it’s one bad day or if it just continues and continues as people take fright,” Alan Clarke, an economist at Bank of Nova Scotia’s Scotiabank unit in London, who took part in Bloomberg’s survey, said yesterday by phone. The pound may weaken to about $1.55 the day after a “yes” vote, he said. The currency traded at $1.6255 at 12:31 p.m. in New York.
The result of the Sept. 18 vote is on a knife edge, with an ICM Research Ltd. poll on the Guardian website today putting support for the “yes” campaign at 49 percent, versus 51 percent for those wanting to keep the 307-year-old union. That followed a poll for Glasgow’s Daily Record newspaper two days ago putting support for the separatists at 47 percent versus 53 percent for “no.” Firms from Standard Life Plc to Royal Bank of Scotland Group Plc have announced plans to move operations south of the border if Salmond wins the campaign.
read more