Cyprus Mail 29 November 2020 - by Reuters News Service
Dollar weakness has shored up the British pound this week, analysts said, but Brexit, combined with an expected push by some Scottish leaders for independence are expected to make sterling volatile.
“Deal or no deal, there’s sure to be chaos early next year. If that encourages people to vote to leave the UK it would be a double blow to the currency,” said Marshall Gittler, head of investment research at BDSwiss Group, in a research note.
For now, the pound is holding steady at 1.33 to the dollar, but has dropped to 1.11 against the euro .
Scottish leader Nicola Sturgeon said the independence vote should take place in the earlier part of the devolved parliament’s next term, which begins next year.
With five weeks left of a transition period before Britain leaves the EU, markets anticipate a deal can be struck even though stumbling blocks remain.
Both sides are calling on the other to compromise over fishing, state aid and how to resolve any future disputes.
“Deal or no deal, there’s sure to be chaos early next year. If that encourages people to vote to leave the UK it would be a double blow to the currency,” said Marshall Gittler, head of investment research at BDSwiss Group, in a research note.
The Swiss franc rose to a five-year high on Monday against a fast-falling dollar, creating a headache for the Swiss National Bank as it battles to keep a lid on its currency.