$GBPUSD Drops as CPI Slows
GBP/USD fell to 10 month lows after inflation in the UK fell to its lowest pace in five years.
The GBP fell against all of its major counterparts today ahead of the Bank of England minutes, which will be released tomorrow. All of this comes before Scotland decides whether or not to leave the UK in the final vote on Thursday.
It is worth noting to avoid the GBP regardless of data on account of the upcoming Scottish referendum, but if the data comes out strong we can expect to see a significant rally on the GBP if Scotland votes NO.
We’ve seen a huge sell-off on the GBP in the weeks run up to this vote, if Scotland votes “NO” which is what I’m expecting we can expect to see a steady normalisation over the coming weeks.
If however we see a “YES” we can expect to see a great deal of further volatility on the GBP. I personally will not be trading the GBP in the run up to the vote as I’ve never traded through a situation like this before.
Whilst there is a chance of Scotland leaving the UK, which will cause additional debt and slower investment in the UK, the economy is still expected to outpace its counterparts this year.
Overall we are expecting to see massive amounts of volatility surrounding the pound as the Scottish vote for independence, so it would be better to avoid trading the GBP until it’s all over.