Markets quiet ahead of Thursday’s Scottish Referendum vote

Claire Hogarth16/Σεπ/2014Currency Updates


Despite the increasing uncertainty in Scotland, sterling remains stable against its peers on Monday with no substantial movement against any of the major currencies. This low volatility is probably due to the lack of major data releases, with nothing of any note released and no major changes in referendum poll results over the weekend as the outcome remains very much in the balance.

Bank of England Governor Mark Carney will cut short international meetings in Australia in order to ensure the financial stability of the UK if the Yes prevails. Clearly all hands will be on deck at the Bank of England and the Treasury to deal with any market instability if Scotland votes for independence.

There may be some added volatility today with the release of the UK Consumer Price Index which will take place at 08:30am.


The euro softened against both the USD and the GBP on Monday on the back of concerns over the state of the Chinese economy. China is a major trade partner for the already fragile Eurozone, accounting for 13% of all Eurozone exports. Any signs of a slowdown in production in China will have a negative impact on the euro. According to the data, Chinese factory production increased by 6.9% on a YoY basis in August, however, this was a steep drop from the previous months figure, and the slowest pace of growth since 2009.

Furthermore, regional German elections have seen growing support for anti-EU political groups. Support for such parties has increased rapidly in the last few years throughout Europe as the Eurozone economy stagnates.


The US dollar reached fresh 14 month highs against its major peers. Speculation continues to grow surrounding the Federal Reserve’s timetable for hikes Analyst are coming to the view the Fed may signal this week that it is moving closer to raising its interest rates. For almost six years the rate has stood at 0.25%. The Fed interest rate decision meeting on Wednesday may for the first time give explicit signals over the timing of the first hike.

Overall output at US factory production fell by 0.4% in August following on from a 0.2% gain in July according to data released by the Federal Reserve Board, as motor vehicle production declined sharply by 7.6%. Mining output did however increase by 0.5%, cushioning the blow and leaving overall industrial production 0.1% lower in August than July. This is however a volatile number and its impact on currency markets was muted.

Rest of the world

The Russian rouble has continued to weaken against the US dollar, falling for a sixth day running to reach a new record low, this amidst clashes between Ukrainian troops and pro-Russian rebels which has caused concerns over the durability of the recent ceasefire. Russia’s currency fell by just shy of 1% against the US dollar within a 24 hour period, with the rouble now having fallen against the USD by 14% since July this year and almost 40% since July 2011.

This year’s worst performing G10 currency, the Swedish kroner, declined to its lowest level since 2012 against the USD as weekend elections in Sweden left it depreciating by 0.3%. Swedish voters have turned away from the Alliance coalition of Fredrik Reinfeldt after eight years, and centre-left parties will probably form a new coalition This government has prospects for more stimulative fiscal policies.


Written by Claire Hogarth

Marketing Executive at Ebury. English Literature graduate from the University of York and a motivated professional.