GBPUSD to benefit from a vote against Scottish independence

“The Cable appreciated to a weekly high (1.6334) on Wednesday morning after it was declared that two members of the Monetary Policy Committee (MPC) voted for a rate increase last month. However, buying pressure was short lived with the pair quickly pulling back to trade around 1.6285 at the time of writing. The lack of buying pressure in the Cable so far this morning exemplifies the nervousness of investors ahead of Thursday’s Scottish referendum.

“I am still expecting a “NO” vote tomorrow and after analyzing the UK economic data in more detail, I am now forecasting the GBPUSD to head towards the 1.67 level, as long as “NO” is the outcome. Two members of the MPC voting for a BoE rate hike for the second successive month clearly shows a divergence of opinion is emerging within the BoE. It is also worth noting that the UK unemployment rate was also confirmed as having declined to 6.2% this morning (BoE has 6% unemployment rate target), and a rate rise is edging closer to reality.

“Although all investor attention is clearly focused on Scotland at the moment, it shouldn’t be dismissed that Carney and the BoE clearly signaled last week that an interest rate hike was likely for around Spring 2015. Previously, investors had become frustrated by receiving mixed signals from the Bank regarding the timing of a rate hike and now we have finally received what appears to be a likely timeframe, I am expecting investor attraction to return for the GBP. ”