The Pound plummeted against all of its major peers over the weekend after a poll revealed that the Yes to Scottish Independence campaign has taken the lead over the pro- Unionist No campaign. The news stunned investors who quickly embarked on a bout of Pound selling. With the referendum vote due to be held on the 18th, Sterling looks set to continue to weaken until the result is made clear.
The US Dollar advanced to a 10-month high against the Pound on Monday as investors ditched the UK currency as uncertainty builds as to whether the United Kingdom will continue to exist in its present form after September 18. Uncertainty over what currency choices an independent Scotland would have available pressured the Pound lower as politicians in Westminster warned that a formal currency union would be impossible.
The Euro recovered all of its lost ground against the Pound over the weekend as fears that Scotland will win independence weighed significantly upon the UK currency. Against the US Dollar and other peers however the single currency remains under pressure after last week’s surprise decision by the European Central Bank to cut interest rates to a new record low.
The ‘Aussie’ gave up some ground against the US Dollar despite the publication of positive domestic jobs data. The currency retreated due to the increasing optimism that the US economic recovery is continuing to strengthen and that the Federal Reserve will become the first major Western Central Bank to hike interest rates.
New Zealand Dollar
The New Zealand Dollar followed its Australian relation downwards due to the strength of the US Dollar. Further losses were restrained after a report out of China, New Zealand’s second biggest export partner, showed that the Asian nation’s trade surplus widened unexpectedly last month.
The ‘Loonie’ surged against the Pound on fears over the Scottish referendum vote. Against the US Dollar, it was softer due to the increased sentiment over the strength of the US economy. Economists are forecasting that the session’s Building Permits data will show a decline.
South African Rand
The Rand followed its peers upwards against the battered Pound but was under pressure against other peers as investors raise their bets that a hike in US interest rates will create more weakness for the South African currency.
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