FX round-up: Sterling could drop up to 10% if Scots vote yes, analysts believe

Cable ended the Friday session slightly higher following a recent 'relief rally' on the back of the latest poll results which showed a small - albeit still highly uncertain - lead for the 'no' camp in the run-up to next Thursday's referendum on Scottish independence.

Cable ended the Friday session slightly higher following a recent 'relief rally' on the back of the latest poll results which showed a small - albeit still highly uncertain - lead for the 'no' camp in the run-up to next Thursday's referendum on Scottish independence.

That saw dollar/cable almost close a 'bearish' gap left behind on the price charts on 5 September.

Cable was up 0.02% at the end of day at 1.6258.

Sterling however continues to trade near 10-month lows. A victory for the 'yes' campaign could see the British pound fall by between 5% to 10% over the following month, according to 61% of analysts participating in a Bloomberg News poll conducted between 5-11 September.

A fresh canvass conducted by telephone by ICM on behalf of The Guardian newspaper showed that 51% of voters want to remain in the United Kingdom while 49% want to leave. Nevertheless, a significant proportion of voters, 17% no less, are as of yet undecided.

The euro/dollar managed to end the session slightly higher, despite the release of some stronger than expected data Stateside, possibly as traders took positions ahead of the next FOMC meeting.

For its part, European Central Bank governing council member Luc Coene indicated that the monetary authority welcomes the drop in the euro.

“The fact that the exchange rate is moving down is certainly not a source of concern for anybody,” Coene remarked to Bloomberg.

Italian industrial production contracted at a 1% pace over the month in July (consensus: -0.2%) pointing to the risk of negative GDP growth this year, Barclays Research explained to clients.

At the euro-area wide level on the other hand industrial output was 1% higher in July (consensus: 0.7%) in comparison to the month before.