Pound Suffers Due To Second Scottish Referendum News

Sterling traded close to a two-week low against the dollar today as investors awaited a speech by U.S. President Donald Trump, with the pound kept under pressure by worries about the future of Britain as it leaves the European Union.

The pound fell to lows on Monday, its weakest in a fortnight, on reports that Scottish nationalists were preparing to demand a fresh independence referendum, possibly as early as March, to coincide with the government’s plan to formally trigger Britain’s exit from the EU.

Scottish First Minister Nicola Sturgeon said in a newspaper article on Tuesday that the “sheer intransigence” of the British government over Brexit could lead to a second referendum.

A British government spokesperson had said on Monday there should not be another vote, and that the mere threat of one was creating unnecessary uncertainty and division.

Sterling’s largely indifferent reaction so far to the flow of news on the possibility of a Scottish referendum follows the pattern seen in the run up to the 2014 referendum.

The risk Scotland’s first minister will call for a second referendum in the aftermath of the triggering of Article 50 could start to weigh rather more heavily on sterling in the weeks ahead.

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