GBP/EUR Continues To Weaken As Referendum Looms
While the GBP has dropped sharply recently as the Scottish referendum looms, better than expected UK industrial production data did strengthen the currency slightly and on Tuesday the GBP reached 0.8011 up from 0.7935.
Furthermore, the Bank of England Governor, Mark Carney, suggested that interest rates are likely to rise next spring. Nonetheless, the strength of the pound very much depends on the outcome of next week’s referendum. Many are predicting that if the Scottish vote for independence then the Pound will lose significant value. In the short term, if the polls released over the next few days keep the Yes campaign in the lead, then the Pound will certainly continue dropping this week.
On the other hand, the Euro has also been dropping in value as EU growth is non-existent and the European Central Bank has not yet finished its report on bank capital. However, most forecast greater weakening of the Pound than the Euro.