Forex snapshot

Sterling has slipped below the $1.69 mark as Scots go to the polls over the independence referendum. Meanwhile, the euro has taken a knock after the Federal Reserve hinted at a sooner-than-expected rate rise.

Pound and dollar currency
Source: Bloomberg

Pound below $1.69 as Scotland decides

The pound is trading at $1.6888. Sterling is under pressure on two fronts today with the comments from the Fed last night, and the Scottish referendum today. Last night, Janet Yellen suggested that interest rates could rise sooner-than-expected and this gave an extra kick to the dollar bull run.

Voting on an independent Scotland is already underway, and even though the latest polls are  favouring a ‘No’ vote, traders are still hesitant to go long the pound. I suspect the pound will remain rangebound throughout the session.

The pound could edge towards the $1.6207 level as risk is on the downside, with $1.6353 acting as resistance.

Euro hit by Fed

The euro is trading at $1.2887. Last night the Fed trimmed quantitative easing from $25 billion to $15 billion, and it is expected to be wound down next month. However, the takeaway story was that interest rates in the US could be hiked shorty after QE ends.

The situation in Ukraine has seemed to drop off the news radar but only good relations between Kiev and Moscow would give traders confidence to buy the euro.

The euro bottomed out at $1.2840 and could be pushed to $1.2960 if the jobless claims are soft from the US at 1.30pm (London time).

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