Latest Scottish referendum poll numbers stabilise the pound
12/Sep/2014 • Currency Updates•
The Scottish referendum once again dominates the news with some relief for sterling as the latest poll conducted by Survation put the No vote 6 percent ahead of the Yes vote at 48% to 42%. This was supported on Thursday evening by the latest YouGov survey which put No narrowly ahead by 4% once Don’t Knows had been excluded. This is the first time the No vote has gained ground since early August according to YouGov. While not a very scientific measure it is worth noting that a rolling average of the last five polls has the No vote ahead, but only by 3%. As a result, sterling was given a minor boost overnight with the GBP gaining against all of its 16 major peers, strengthening +-0.3% vs. the dollar and +-0.2% vs. the euro.
The euro found some breathing space against the greenback as it avoided reaching a new 14 month low set on Wednesday and strengthened by 0.25% vs. the Dollar. The overall position, however, remains poor with there still being a notable divergence between the United States and Europe in terms of overall economic strength and their individual expectations for future monetary policy.
Thursday also saw a speech by the President of the European Central Bank, Mario Draghi where he reiterated the scenes from last week’s ECB conference, with the market impact being muted.
The number of American’s filing for unemployment benefits reached its highest levels since late June after new data was released, however, volatile numbers means this is not as significant as it appears, with the 4 week average almost unchanged. This factor, however, did contribute to the dollar retreating from six year highs against the Japanese yen, although the dollar index remained on track to post its ninth consecutive week of gains. The weakening position of the euro and yen have greatly contributed to the recent strengthening of the USD, with the Bank of Japan expected to launch new stimulus in order to address the low levels of inflation and flagging economy that it is experiencing.
Most currencies traded sideways against the dollar, although the most notable under-performer was the New Zealand dollar that weakened by +-0.5% against the USD, the lowest level since February after the central bank left its benchmark interest rate unchanged.
Friday’s major economic event in the US is the announcement of the retail sales by the US Census Bureau, which is a primary indicator of consumer spending within the country. This will take place at 12:30pm GMT.