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Pound Hits 2-Year High Against Euro on Scotland Results

Pound Hits 2-Year High Against Euro on Scotland Results

The British pound surged to a more than two-year high against the euro Friday, while it also rallied against the dollar as early results suggested Scotland will vote against independence from the United Kingdom.

The euro tumbled to 0.7809 pounds in early Tokyo trade, down from 0.7882 pounds and its lowest level since July 2012, as dealers welcomed initial returns pointing to a disappointing night for the “Yes” camp.

Sterling also jumped to $1.6522, its highest level since early September and much stronger than the $1.6389 in New York. It is also well up from the $1.6227 in Asia earlier Thursday.

The pound hit a six-year high of 180.16 yen, up from 178.78 yen Thursday.

The pound had suffered a sell-off in the past week after an opinion poll showed a majority of people in favour of leaving the 307-year-old union, which would have hammered the economy.

“As we await the results of the Scottish Independence vote to come through this afternoon, the (pound) is anticipating that the ‘No’ vote will win,” National Australia Bank said in a note.

In July, sterling hit its highest level against the dollar since 2008 during the financial crisis, but then plummeted to a 10-month low as polls showed strong gains for the “Yes” campaign.

A vote to stay in the United Kingdom “would remove uncertainty over some very big issues”, said Alan Ruskin, global head of G10 foreign-exchange strategy at Deutsche Bank.

The pound “can now revert back to the traditional fundamentals which had been driving it, such as the relative strength of the UK economy and expectations of tightening by the Bank of England”, he told Dow Jones Newswires.


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