The Pound has dropped by -0.3% against the US Dollar today and could be in for further spells of turbulence with Brexit looming.
The most recent slump in the Pound has come from fears that a second Scottish Independence Referendum, or ‘IndyRef2’, might be on the way.
These concerns came to light after a report from the Times indicated that Scottish First Minister Nicola Sturgeon plans to trigger a second independence campaign at the same time that Prime Minister Theresa May triggers Article 50 to leave the EU.
While a majority voted to stay with the UK in the previous independence referendum, Sturgeon has been highly vocal about keeping Scotland in the EU, even if it means parting ways with the rest of the UK.
This is partly on account of trade deals; Sturgeon has emphasised that she wishes Scotland to maintain favourable trading conditions with the EU, which may not be possible if Scotland remains part of the UK.
One spokesperson voiced the Scottish National Party’s (SNP) discontent at the situation;
‘There is already a cast-iron democratic mandate for an independence referendum – that was delivered in last year’s Holyrood election, however much the Tories might try to deny it. That mandate also stems from the EU referendum, which saw Scotland vote by a 24-point margin to stay in Europe – and Theresa May’s reckless pursuit of an economically ruinous hard Brexit will only strengthen opinion in Scotland against leaving Europe’.
Tax policies are likely to have a strong influence on the US Dollar looking ahead, with a future clarification from Trump potentially causing the greatest USD movement.
If Trump finally offers some clarity on his intended course of action and (more importantly) if it appears achievable, the US Dollar could enjoy a broad-based rally.
If, however, Trump’s ‘phenomenal’ tax plans disappoint, the GBP/USD exchange rate could test psychological resistance once more.
Recent Interbank GBP USD Exchange Rates
At the time of writing, the Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.24 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.80.
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