Pound Surges 1% as Risk of Imminent Scotland Referendum Recedes
- Investor relief felt given the SNP result wasn’t more emphatic
- Still, SNP independence push will be headwind for sterling
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The pound strengthened more than 1% against the dollar after the Scottish National Party’s election showing pushed back the risk of a near-term vote on independence, yet traders are bracing for further clashes over the U.K.’s future down the road.
Sterling climbed by the most in almost a month to $1.4134 on Monday, its highest level since February, after the SNP fell one seat short of a parliamentary majority. Strategists from Rabobank International to Credit Agricole SA cite the push for a referendum -- which U.K. Prime Minister Boris Johnson opposes -- as a headwind that could create volatility in the months to come.