The Pound Sterling (GBP) to US Dollar (USD) exchange rate was experiencing mixed trade on Monday, as the markets were growing increasingly jittery ahead of Thursday’s Scottish Independence Referendum.
With the vote, dividing the markets the Pound has experienced a see sawing of movement. Earlier in Monday’s session, it was trading firmer against several of its peers but as the session progressed, it then went back onto the retreat.
Last week the Bank of England ruled out the possibility of a currency union and a number of major businesses and banks have said that they would leave the country if Scotland votes in favour of leaving the 300-year old union.
Property website Zoopla said on Monday that a victory for the nationalists could wipe £31,000 or 17%, off the average house price in Scotland with the average currently being valued about £177,600.
The no campaign is hoping that comments like that will persuade undecided Scots to vote in favour of staying a part of the UK.
Sterling fell despite the release of mixed economic data out of the world’s largest economy. Investors are concerned and unsure as to what currency an independent Scotland would use as well being worried over how much of the national debt it would inherit.
Data released by the Federal Reserve showed that Industrial production in the USA declined in August for the first time since January 2014. Production declined by 0.1%, wiping out the previous months gains of 0.2% and disappointing economist expectations for an improvement of 0.4%. On an annual basis production increased by 4.1%, below forecasts for a rise to 5%.
Despite that, investors chose to widely ignore the data and instead continued to forecast that the Federal Reserve is getting closer to raising interest rates and ending its monthly bond-buying programme by October.
A separate report by the Federal Reserve Bank of New York showed that its general business conditions index climbed to its highest level in five-years to a reading of 27.5 in September, up from the preceding month’s figure of 14.7.
Economists had expected the index to rise to 16.0 this month.
Pound Sterling to US Dollar Exchange Rate Forecast
Tuesday could see the Pound regain some ground due to the release of a number of important domestic data releases. Of particular interest will be the latest UK Inflation rate and PPI data.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.6155,
US Dollar,,Euro,0.7724 ,
US Dollar,,Canadian Dollar,1.1061 ,
US Dollar,,Australian Dollar,1.1054 ,
Pound Sterling,,US Dollar,1.6245 ,
Euro,,US Dollar,1.2946 ,
[/table]
