Scottish independence vote still dominating the market as the Bank of England minutes show no surprises (Mike Vaughan)

GBP EUR Exchange Rate: Weekly Review July 16  

This mornings Bank of England minutes showed a 7-2 split in favour of holding interest rates at 0.5% as expected. This came as unemployment figures fell from 6.3% to 6.2%

Sterling has had an extremely volatile start to the month as the Scottish independence vote continues to play havoc with the value of sterling. Following last Sunday’s poll suggesting the ’yes’ vote was leading; a poll last week indicated that the vote was now creeping in favour of the ‘no’ camp. This uncertainty is creating big swings and the market volatility is clear to see with the pound having shifted from a high low of 1.2620-1.2390 against against the Euro (1.9%) last week alone.

Sterling/Euro

GBP/EUR rates are still trading just a cent off from a near two year high and again this week’s movements are set to be dominated by sterling’s shifts. For me I still believe the ‘no’ vote will prevail and as a result I would expect the pound to see some support when the results from the referendum will be released on Thursday. Should you be selling Euros you may wish consider your position before the 18th

A word of warning however, should the vote be a yes then some analysts are suggesting the pound could lose as much as 10%!!!

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