What happened over the weekend that GBP/USD has opened with a huge Sunday Gap of more than 150 pips. Currency traders were not anticipating anything drastic over the weekend but something happened over the weekend that has forced GBP/USD on a downward trajectory. Sterling fell to a 10-month low while British shares and government bonds showed strains on Monday, as a poll put the campaign for Scotland to split from the rest of the UK in the lead for the first time — just 10 days before the final vote.
Scottish independence is making the UK economy jittery. Recent opinion polls show that Scotland will vote for independence next week. Sterling dropped the most in more than a year versus the dollar as opinion polls highlighted the risk Scotland will vote for independence next week, potentially splintering the U.K.’s 307-year-old union. It appears GBP/USD and GBP/JPY downtrend will get strong if Scotland independence vote goes through. A “Yes” vote for independence would prompt a significant increase in the volatility of U.K. assets, while the pound would fall against the euro and particularly the dollar, RIA’s Stamenkovic said in response to e-mailed questions.