Saxo Bank | Sep 19, 2014 06:40AM ET
The Scotland independence referendum has seen a clear victory for the No vote, with about a 55/45 split this morning with virtually all votes counted. Sterling has seen the expected relief rally on the development, though it’s been of a fairly modest magnitude as it was rather evident that the market was already leaning heavily in anticipation of a No vote in the final pre-vote sessions.
From this point, any further GBP strength will not be about the referendum but rather about UK fundamentals and anticipation of Bank of England policy. If EU growth worries continue to tilt lower, I suspect there will be an eventual contagion across the channel into the UK. For now, let’s focus on whether these new, sub-0.7875 lows in EURGBP hold.
GBPUSD
GBPUSD has pulled sharply higher on the result and challenged the technical important 1.6500-plus area (which is near a key previous low). Skeptics of upside potential may look to fade the move in this area which, if it fails to hold, could open up for a full test of the 200-day moving average.
Canada Aug. CPI (12:30)
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