Scotland Independence and Money Transfers - Pound Exchange Rates Volatile

Market concerns about the potential for political instability in the run-up to the Scottish referendum on the 18th September is causing havoc in the foreign exchange market for a second day in a row with the Pound bearing the brunt.

Despite better than expected UK economic data out in each of the last two trading days, Tuesday morning’s YouGov opinion poll showing that the ‘Yes for independence’ campaign only needs to capture another 3% points to take the lead in the opinion polls is sinking the value of the Pound.

The Pound in yesterday’s currency markets is now trading at a 10 month low against the Australian Dollar and has also registered sharp losses across the board.

The Pound’s fall from grace against the Euro has only been slowed down by speculation surrounding what the European Central Bank (ECB) may announce at the end of their policy meeting later on today. With euro zone data continuing to deteriorate and even the euro zone powerhouse Germany starting to be affected, some analysts are predicting that the ECB may go the way of other central banks like the Bank of England; the Federal Reserve in the USA and the Bank of Japan by introducing some form of Quantitative Easing (QE) into their policy mix at their latest policy announcement due at lunch time today.

Elsewhere, the various political flashpoints in the world (Syria; Iraq; Libya; Gaza and the Ukraine) are keeping a healthy demand on the US Dollar. Together with the tightening of policy by the Fed, the US Dollar continues to make inroads across the board.