Sterling tumbles against the dollar on speculation over another Scottish independence referendum
The pound fell during early Asian trading after reports that Scotland could be about to call a second independence referendum.
Concerns around a renewed push for Scottish independence have increased in strength since the EU referendum, however yesterday the Times reported that Theresa May is preparing for another vote.
The pound tumbled to $1.2392 against the dollar in the early hours of this morning, and at pixel time was down 0.5 per cent, hovering around $1.24.
Sterling dipped against the dollar in early Asian trading (Source: Bloomberg)
"The Scottish concerns are, in fact, nothing new," said LCG Insight's Ipek Ozkardeskaya.
"The UK’s decision to quit the European Union had immediately triggered questions regarding Scotland’s future in the United Kingdom. However, the eventuality hasn’t been largely factored in the pound’s value so far.
"If Scotland decides to proceed with the second referendum to quit the UK, there would certainly be another fundamental downshift in the pound’s value, both against the US dollar and the euro."
Nicola Sturgeon said last year that a second vote on Scottish independence was "highly likely" before 2020. Sturgeon has also called for Scotland to retain its membership of the Single Market, despite the Prime Minister signalling the UK will leave it.
The pound's slide was good news for the FTSE, noted Spreadex analyst Connor Campbell – the index rose around 20 points after the bell.