Pound falls sharply on reports of fresh Scottish referendum

Sterling slid by as much as 0.7 per cent to US$1.2384 yesterday, its lowest in nearly a fortnight. It last traded down 0.3 per cent at US$1.2431.
Sterling slid by as much as 0.7 per cent to US$1.2384 yesterday, its lowest in nearly a fortnight. It last traded down 0.3 per cent at US$1.2431.PHOTO: AGENCE FRANCE-PRESSE

LONDON • Sterling fell broadly against major currencies yesterday, as the prospect of another Scottish independence vote and signs a major bourse merger was unlikely to go through renewed fears about Britain's future as it prepares to leave the European Union.

A report in the Times of London said British Prime Minister Theresa May is preparing for Scotland to call a fresh referendum next month.

Scotland had voted 55 per cent to 45 per cent in September 2014 to stay inside the United Kingdom.

The Telegraph newspaper, meanwhile, reported that Mrs May is planning to curb freedom of movement for EU citizens as soon as she triggers Article 50 - Britain's formal notification to leave the bloc.

Sterling slid by as much as 0.7 per cent to US$1.2384, its lowest in nearly a fortnight. It last traded down 0.3 per cent at US$1.2431.

It also fell 0.5 per cent to 85.15 pence per euro. Against the Singapore dollar, it tumbled 0.8 per cent to S$1.7481 as of 6.17 pm.

"One of the reasons (sterling is down), is the announcement that the merger between LSE and Deutsche Boerse may be off the table," Mr Richard Cochinos, a head of European currency strategy at Citi, told Reuters.

The London Stock Exchange on Sunday all but ended a planned merger with Deutsche Boerse by ruling out meeting a European anti- trust demand, saying it has strong prospects alone.

But Westpac Banking's senior strategist Sean Callow said: "It seems unlikely Westminster would agree to another referendum any time soon. I wouldn't be surprised to see pound/greenback back above 1.2450 in London trade unless there has been a genuine change in the timetable for another Scottish vote."

A version of this article appeared in the print edition of The Straits Times on February 28, 2017, with the headline 'Pound falls sharply on reports of fresh Scottish referendum'. Print Edition | Subscribe