Currency news this week as Scotland decides
15 September, 2014
Last week saw a very volatile Pound bouncing around as it reacted to ever varying polls showing the likelihood of a Yes or No vote in this week’s Scottish referendum. The week started with the Yes camp in the lead but ended with the No camp on the front foot after a week of strong campaigning from the Westminster party leaders and the intervention of many large businesses, who mainly seem to think that in the case of a Yes vote they would need to move their head offices out of Scotland to guarantee currency and overall economic stability.
This week sees the actual referendum on Thursday – so we will finally see which way things are going to go. A Yes vote will almost certainly mean a weak Pound – the IMF last week stated that a Yes vote would have a “short term negative impact on the markets” – whereas a No vote could see a recovery of some of the uncertainty driven losses we have experienced over the last few weeks.
There is a fairly busy week’s worth of data too, but unless something dramatic happens to surprise the market, I think the main driver will continue to be the Scottish referendum. Here is a summary:
European Trade Balance
US Industrial Production
UK CPI/RPI Inflation
UK Producer Price Index
European ZEW Economic Sentiment Survey
US Producer Price Index
UK Bank of England MPC Meeting Minutes
European CPI Inflation
US CPI Inflation
US FED Policy Statement
UK Retail Sales
European Current Account
There are some important releases there and obviously the non-UK figures could easily cause some movement above and beyond what is happening in Scotland. Especially worth keeping an eye on the FED Policy Statement – the US Dollar is the dominant currency at present so a strong tone from the FED could see further strength there.
At home we will all be locked on Thursday’s referendum – keep in close contact with your CI account manager to make sure you are kept informed of how the currency news is affecting your upcoming currency purchase.
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