Pound Suffers on Scotland Poll
Sterling dropped as opinion polls highlighted the risk Scotland will vote for independence next week, potentially splintering the U.K.’s 307-year-old union.
Britain’s currency slid to the weakest against the dollar since November after a poll by YouGov Plc showed the Scottish independence campaign gained a lead for the first time this year with the vote looming on Sept. 18.
“This ensures that even if Scotland votes ‘‘No’’ next week the issue will not go away,” said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd. in Auckland.
Following months of surveys that showed Scotland was unlikely to vote to leave the U.K., the latest results have shocked the currency market into action.
“The referendum is on a knife edge,” Nick Stamenkovic, an Edinburgh-based fixed-income strategist at broker RIA Capital Markets Ltd, said yesterday. “Markets have been too complacent but are now waking up to the increased risk of Scotland voting for independence.”
This weekend’s YouGov survey for the Sunday Times showed “Yes” voters increased to 51 percent, while the “No” side dropped to 49 percent, when undecided respondents were excluded.
A win for Scottish nationalists may have “severe” consequences in the short term and spark a pound sell off, Goldman Sachs Group Inc. economist Kevin Daly said in a Bloomberg TV interview last week.
Source: Bloomberg
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