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GBP/USD Falls After Referendum Jump

GBP/USD Falls After Referendum Jump

Throughout the majority of last week the GBP/USD pairing stayed relatively steady. However, when the Scottish referendum produced a ‘No’ result it jumped up to 1.6518. Nonetheless, it fell throughout Friday and by close had dropped to 1.6285, just slightly higher that it’s opening level of 1.6271 on Monday.

The pound fell on Friday as investors sold the currency for profit. At the same time, the dollar strengthened on expectations that monetary policy will tighten next year. The Federal Reserve suggested that it will close its bond-buying stimulus program next month and raise interest rates in 2015.

The UK political establishment is currently working through the aftermath of the Scottish referendum and as a result the pound could weaken slightly in the next week. The dollar is expected to remain strong so the pair is likely to fall.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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