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Currencies CHF British Pound Sinks as Scottish Independence Poll Fuels Capital Flight

Talking Points:

  • British Pound Sinks as Scottish Independence Poll Sets Off Capital Flight
  • Swiss Franc May Decline if August Inflation Data Falls Short of Forecasts
  • See Economic Releases Directly on Your Charts with the DailyFX News App

The British Pound tumbled against all of its major counterparts to start the trading week, losing as much as 0.9 percent on average. The move reflected capital flight amid uncertainty linked to the outcome of next week’s Scottish Independence referendum. A YouGov/Sunday Times poll published over the weekend showed those intending to vote in favor of seceding from the UK outnumbered those favoring the status quo for the first time, albeit by a narrow margin (47% for independence, 45% against, 7% undecided).

Looking ahead, a quiet economic in European trading hours offers little by way of market-moving event risk. Augusts’ Swiss CPI figures may draw attention however as persistent Euro weakness pushes EURCHF toward the SNB’s target floor of 1.20. The benchmark year-on-year inflation rate is expected to print flat, unchanged from the prior month. Leading survey data hints at a sharp slowdown in price growth however, opening the door for a downside surprise. That may fuel speculation that the SNB will need to expand stimulus, weighing on the Franc. We remain long USDCHF.

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