The sterling McWobble is over for now, reports FTAdviser sister title FastFT.
The pound has steadied against the dollar, following a volatile couple of days when sterling was pressured by polls indicating there had been a surge of support in Scotland for a breakaway from Britain.
By 5.15am in London, sterling was flat on Tuesday’s close at 1.6116 US dollars.
Sterling on Tuesday slipped to buy 1.6067 US dollars in intraday trading, its weakest since last November, before firming up again.
A Sunday Times/YouGov poll released over the weekend put the campaign for independence narrowly ahead by 51 per cent to 49 per cent – the first time a survey has given the Yes side a lead this year.
A separate poll by TNS published on Tuesday said the vote was too close to call, but also found that 38 per cent of Scots planned to vote for independence, up from 32 per cent a month ago. TNS also found that 39 per cent of Scots planned to vote to stay in the union.
As the FT’s Jamie Chisholm explained here, sterling’s mild rebound may have less to do with renewed confidence the union will survive than with a technical trading pattern.
Sterling’s sharp move lower on Monday took the sterling/dollar exchange rate’s 14-day relative strength index – a momentum gauge – down to a six year low of 13.
Any figure below 30 is considered in technically “oversold” territory, so sterling’s sudden resilience may mainly reflect the fact that traders who were selling the currency short have taken profits and closed off their negative bets.
