We are hearing the No campaign is slightly ahead in the polls after last week the No’s were slightly ahead. This has given the pound a rise from, last weeks lows of 1.2394 and is pushing the 1.2550 level. Today CPI inflation for the UK came out pretty much as expected so eyes are now looking towards the bank of England minutes out tomorrow to see if any further members are voting for an interest rate hike. last month the split was 7-2 and if we see a 6-3 then the pound could well be in for further gains.
The main risk factor though for anyone with a requirement is the Scottish Referendum. The way that I see it is as follows.There is likely to be a major reaction, particularly for sterling, whichever way the vote goes. A vote for independence will highly likely result in a further appreciable sterling sell-off causing the pound to fall by as much as 10% over the coming weeks and months. A vote for Scotland to remain in the UK is likely to lead to a significant relief rally for the pound and we could see a slight gain from the current trading levels.
For those looking at selling the pound the risk to gain ratio is not worth taking the gamble on what may occur. With the polls so close at the moment the risks of losing thousands of the currency you need to buy by waiting until after the vote could be extremely costly and we have seen many clients capitalise on the current rates due to the uncertainty. It is not inconceivable that the YES campaign will be victorious and it could be the biggest surprise of our generation.
So if you need to buy or sell the pound against the Euro then please do feel free to contact myself Ben Amrany at [email protected] If you inform me of your requirement I will explain the options available to you in trying to minimise any risks to the market and help you achieve a better rate than the banks.
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