Today sees the huge issue of the Scottish Referendum dominating headlines again. If Scotland votes to leave the Union then the pound could collapse and even the under fire Euro could see major gains. However, should Scotland vote No as I anticipate, then sterling is likely to experience a relief rally as the uncertainty over the future of the pound is secured. The polls yesterday seemed to point to a no vote, and with UK unemployment dropping as well, the pound is a bit like a coiled spring at the minute but there is always the risk it could turn into an out of shape slinky should Scotland vote Yes and be little use to anyone!
EU inflation yesterday was slightly better than some expected but was still very weak compared with ECB target rates so it remains to be seen if their recent measures are having the desired effect, or whether more unusual measures will be used. This is likely to keep the Euro under pressure- for anyone holding Euros who is looking to move to sterling then they should be worried by current USD EUR and AUD EUR rates as it goes to show just how much the pound could strengthen back against the single currency once the uncertainty of the referendum is removed!
The results are expected early tomorrow morning but I would imagine even a strong showing in the exit polls could be enough to trigger sterling movement.
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