Our thoughts: The pound has been rising against Sing Dollar in the 1st half of 2014. This is a well- awaited chance for those who intend to plan their winter holidays in UK or those intending to purchase a property there to take advantage of the weak Pound. On a more sentimental note, if Scotland gain independence, United Kingdom will never be the same and a new chapter will begin.
To sum up this news in 3 pointers:
- What is it? – The people of Scotland will be voting on 18 Sep 2014 for a chance to become an independence country
- What’s the likelihood? – Based on the currency market movement for the Pound, and a poll conducted, there is likelihood that Scotland could end up been an independent country.
- How much has the Pound dropped? – Against the US Dollar, 1 unit of Pound can buy US$1.6208 on 8 Sep compared to US$1.6323 on 5 Sep.
For the full article from ChannelNewsAsia here
The pound hit a 10-month low on Monday (Sep 8) after a poll suggested Scotland could vote for independence in next week’s referendum, while the dollar and euro moved in a narrow range after the European Central Bank’s surprise stimulus measures.
The British unit bought US$1.6208, its weakest since November and well down from US$1.6323 in New York on Friday, after a YouGov survey for the Sunday Times showed for the first time more people for a break from the United Kingdom than against. The greenback was at ¥105.08, against ¥105.06 in New York on Friday. The euro stood at US$1.2941 and ¥135.96, compared with US$1.2951 and ¥136.14 in US trade.
A “Yes” vote would see the end of a 307-year union with England, although details of what currency an independent Scotland would use and what effect its secession would have on the British economy are murky. “The pound has gapped lower by more than a big figure” following the survey, the National Bank of Australia said in a note to clients. Previous polls have shown voters are expected to opt for the status quo.
Investors were also eyeing the ceasefire in Ukraine, which Kiev and pro-Russian rebels signed last week. Sporadic fighting and a lack of detail on the terms were casting doubt on its feasibility.
The euro could face further pressure as investors digest the ECB’s deflation-fighting package, including an unexpected rate cut, to boost the economy. “The latest ECB policy surprise is likely to drive an even greater ‘yield-wedge’ between the euro, the dollar and other core currencies in the coming month,” Credit Agricole said in a note to its clients.
Any further “refinement” of ECB chief Mario Draghi’s comments could also weigh on the single currency, the bank said. “Indeed, many investors are likely to be motivated to accelerate their rebalancing plans on seemingly greater ECB determination to lift eurozone competitiveness,” Credit Agricole said.
The market reacted little to revised Japanese data showing the world’s third largest economy shrank 1.8 per cent in three months to June, worse than the previously estimated fall of 1.7 per cent. The dollar was lower against other Asia-Pacific currencies. It eased to S$1.2541 from S$1.2558 on Friday, to 31.99 Thai baht from 32.11 baht, to 1,023.78 South Korean won from 1,025.25 won and 43.55 Philippine pesos from 43.66 pesos.
The dollar also fell to NT$29.91 from NT$29.94, to 60.20 Indian rupees from 60.43 rupees and 11,711.90 Indonesian rupiah from 11,765.00 rupiah. The Australian dollar inched up to 93.67 US cents from 93.41 cents while the Chinese yuan changed hands at 17.10 yen against 17.11 yen.