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Mon 30 Nov 2020 21:07GMT

Sturgeon Warns of Second Scottish Referendum, GBP Slides

Published: 18 Jan at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada,

Sterling
After peaking overnight on Tuesday the Pound (GBP) spent much of Wednesday tumbling against its peers as the positive sentiment towards Prime Minister Theresa May’s speech began to drop.
Sterling began to fall this morning as the Scottish First Minister, Nicola Sturgeon warned that by leaving the single market the UK would face an economic catastrophe and would pave the way for a second Scottish referendum.
These losses were extended in the afternoon as a number of London banks announced that some staff would have to be moved abroad once the UK left the EU.

Euro
The Pound Euro (EUR) exchange rate dipped today as 'Brexit' fears began to overwhelm Sterling once again.
The single currency’s rise was also supported by a jump in Eurozone inflation as it rose from 0.6% to 1.1% in December, closing in on the European Central Bank’s (ECB) target of 2% inflation.
However this is unlikely to impact the ECB’s policy meeting tomorrow when policymakers are expected to vote to keep interest rates at 0%.

US Dollar
‘Cable’ dropped around a cent from its best levels today as markets reacted to Sturgeons warning of a second Scottish referendum.
The US Dollar (USD) made further gains in the afternoon following the release of the US’s latest Consumer Price Index as it reported that the inflation rate hit a two-year high as it jumped from 1.7% to 2.1% in December.
The ‘Greenback’s advance could be extended further later this evening if Federal Reserve Chair, Janet Yellen makes any further mention of future interest rate hikes in 2017 during her speech in San Francisco.

Canadian Dollar
Sterling also fell against the Canadian Dollar (CAD) as underlying 'Brexit' concerns forced the Pound to retreat. Meanwhile the ‘Loonie’ was strengthened by a slight uptick in oil prices, although the bump could be short-lived if the US reports a rise in its crude stocks on Thursday.

Australian Dollar
The Pound Australian Dollar’s (AUD) advance was also cut short this morning as the ‘Aussie’ was bolstered by a rise in Consumer Confidence, with Westpac’s reading showing a slight improvement as it rose from 97.3 to 97.4 in January.
AUD may struggle to advance tomorrow however as Australia’s unemployment rate is expected to remain unchanged at 5.7% in December, with fewer people expected to enter the job market than in November.

New Zealand Dollar
HSBC’s warning that 'Brexit' world force the Bank to move personnel to Europe caused the Pound to drop by around a cent against the New Zealand Dollar (NZD) on Wednesday. A trend that may continue on Friday if ANZ reports an improvement in consumer confidence in January.


As of Wednesday, 18th January 2017, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1536, GBP USD exchange rate was 1.2259, GBP AUD exchange rate was 1.6328, GBP NZD exchange rate was 1.72, and GBP CAD exchange rate was 1.6263.
Dominic Lee About Author: (443 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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