The British pound rose on Monday despite an announcement from Scotland’s First Minister outlining plans to hold a second independence referendum in light of Brexit. Sterling climbed over 0.6% versus the euro to 1.147, and rose more than 0.5% against the US dollar to 1.222.
The currency rose even after Nicola Sturgeon said she would seek the approval of MSPs at Holyrood next week to start negotiations with the UK Government on a deal that would allow a legally binding ballot to be held.
The move could mean a second independence vote could take place as early as autumn 2018 – but the news did not surprise markets.
Jasper Lawler, a senior market analyst at London Capital Group, said: “The British pound was higher on the day since the announcement was well telegraphed by Scottish First Minister Nicola Sturgeon.
“The pound has already fallen sharply since the first rumblings of another referendum began two weeks ago.”
He said future currency movements will depend on whether UK Prime Minister Theresa May decides to allow Ms Sturgeon to hold the vote.
However, “the critical language so far from the Government would suggest it won’t grant the referendum,” Mr Lawler added.