Pound continues rally vs the dollar from last week
The British Pound made a flying start to the week on Monday as investors seem reassured that the political climate will remain calm.
The Scottish National Party, led by Nicola Sturgeon, won 64 seats in the Scottish Parliament election, one short of a majority.
If Scotland gains its independence from the UK then a question would be raised of what the future of the currency would be, as well as the impact on British companies.
The election results, at the very least, suggests that a seccession is unlikely to occur in the near future, as Sturgeon’s party will now refocus on navigating the rest of the coronavirus pandemic.
The Pound-to-Dollar rate rose to $1.405, its highest point since the middle of February, while the Pound-to-Euro rate also rose €1.15819.
“For EUR/GBP, markets will digest the Scottish Parliament election results, where SNP fell short of winning the absolute majority, but where pro-independence parties did not,” says Mikael Olai Milhøj, Chief Analyst at Danske Bank, as reported in Pound Sterling Live.
“We doubt, however, that another independence referendum will be a theme for long, given it will take a long time before such a referendum would take place, as the Conservative government still rejects it,” Milhøj added.
The Pound-to-Dollar rate saw a rally last week, getting as high as $1.3919, after US nonfarm payroll figures came in well below expectations, rising by 266,000 on Friday, as the unemployment rate rose to 6.1%.
Dow Jones estimates had been for 1m new jobs to be added, in addition to an unemployment rate of 5.8%.
