GBP/USD soars with Scotland independence referendum yielding “NO”
The GBP/USD ascended to a two and a half week high on Friday, as the Scotland independence referendum, with a record participation of voters, showed the predominance of opinions for the country staying within the UK.
The forex market saw the British pound ascending on Friday, reaching the highest in two and a half weeks, as the independence referendum on Scotland’s fate as part of the UK took place on September 18. The dollar still remained well bid compared to other major currencies, though.
In late Asian trade, the GBP/USD reached 1.6525. That was the pair’s highest since September 2. Support for the cable is likely at 1.6327, the September 4 low and a 10-month low; resistance is expected at 1.6615, the September 2 high.
The firming of the pound stemmed from the firm rejection of Scotland’s independence, as on Thursday the vote showed a preference for remaining within the UK, with a record participation of voters.
Last week the GBP selloff on a broad base was due to the uncertainty preceding the independence referendum, regarding the currency Scotland would use as a potentially independent country, and also about the amount of UK national debt it would take.
In the meantime, dollar demand remained high, as on Wednesday the Fed stated again it intended to keep rates low for a considerable period of time after the ending of its bond purchasing program. The Federal Reserve also made another $10 billion cut to its monthly asset purchasing program, with the program finishing next month.
Markets ignored several reports: there was no significant reaction to the Philadelphia Fed’s manufacturing index slumping to a three-month low for this month; the report data on US building permits declining by 5.6% in the last month; and housing beginning to decline by 14.4%.
EUR/GBP was seen sliding by 0.43 %, to 0.7848.
