Sterling has had an extremely volatile start to the month as the Scottish independence vote continues to play havoc with the value of sterling. Following last Sunday’s poll suggesting the ’yes’ vote was leading; a poll last week indicated that the vote was now creeping in favour of the ‘no’ camp. This uncertainty is creating big swings and the market volatility is clear to see with the pound having shifted from a high low of 1.6530-1.6070 against against the Euro (1.6%) last week alone.
As the market appears to be focusing entirely on the Scottish independence, other data sets are not having the usual impact on the pound. Last week’s industrial and manufacturing figures were better than forecast and Mark Carney also hinted the first rate hike could be in the spring of 2015. Under normal trading conditions I would have expected the pound to have gained in value, however one thing can be said the current trading conditions are far from normal and highlights how important it is to keep in contact with your broker.
GBP/EUR rates are still trading just a cent off from a near two year high and again this week’s movements are set to be dominated by sterling’s shifts. For me I still believe the ‘no’ vote will prevail and as a result I would expect the pound to see some support when the results from the referendum will be released on Thursday. Should you be selling Euros you may wish consider your position before the 18th
Also worth keeping an eye on tomorrow’s Bank of England minutes at 09:30 and
If your business makes foreign exchange payments or you are buying or selling a property in the future, a forward contract is the only way to guarantee your price once a deal is finalised.If you would like to protect yourself against future market losses, you can utilise one of our forward contracts, which will allow you to lock in a rate and remove the uncertainty moving forward. Please contact me to learn more about this very popular option. I can be reached by email on [email protected]