TOKYO, Sept 19: Sterling rose to a two-week high against the U.S. dollar and two-year peak against the euro on Friday, taking comfort from a poll showing support for Scotland to remain in the United Kingdom.
That came just after a referendum vote closed, helping push the pound more than a half U.S. cent to $1.6461, its highest since Sept. 4. The YouGov survey showed support for Scottish independence amounted to 46 percent of the electorate with 54 percent wanting to stay in the United Kingdom. ‘The YouGov survey seems to have a fairly big sample size so I suspect it will be not that off the official result,’ said a trader at a Japanese bank.
The British currency last stood at $1.6435, up 0.2 percent from late U.S. trade and extending its bounce from a 10-month low of $1.6052 hit on Sept. 10.
Against the euro, it hit a two-year high of 78.48 pence per euro and climbed to a six-year high of 178.99 yen .
‘The market seems to have priced in the high likelihood of the Unionists winning so reaction will likely be limited if they win, while if Scots vote for independence, there should be huge selling in sterling,’ said Tohru Sasaki, head of research at JPMorgan Chase Bank in Tokyo.
The U.S. dollar stood tall against the yen, after scaling a six-year high on Thursday as a drop in U.S. jobless claims reinforced the market’s view of the diverging trajectory of interest rates between the United States and Japan. The dollar rose as high as 108.965 yen on Thursday and last stood at 108.77 yen.
While other U.S. data on Thursday showed some weakness in home building and factory activity, they hardly dented the perception that the U.S. central bank will be well ahead of the likes of the Bank of Japan in tightening rates. The Federal Reserve reiterated this week that near zero rates will be maintained for a considerable time, but policymakers also indicated they expect faster rate hikes next year and the year after.
That boosted yields on U.S. notes, and hence the yield appeal of the dollar.
The dollar index, a measure of the greenback’s value against six currencies, climbed to 84.743, its strongest level in more than four years and last stood at 84.268. The euro also hit a 14-month low of $1.2834 on Thursday before bouncing back higher and it last traded at $1.2917. (AGENCIES)
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