05/05 – Final polling suggests independence risk overstated

05/05 – Final polling suggests independence risk overstated

GBP: SNP losses help sterling 

EUR: In danger with no data to support it

USD: An unexpected day


Dollar markets grabbed the limelight yesterday with sterling preferring to keep its card close to its chest ahead of a busy day tomorrow. That being said, the pound is on the front foot this morning with analysts split over whether the Bank of England meeting tomorrow afternoon will see the Old Lady of Threadneedle St decide to hint at reducing the level of stimulus it is providing the UK economy.

Polling overnight suggests that the SNP have lost further ground ahead of voting tomorrow morning. Polling by Savanta Com Res has the SNP still the largest party but only gaining 42% of the vote, down 3% on the week.

We believe any weakness in the pound from the election results will be used as an entry level for people to buy sterling and hence any declines may well be short-lived.


Anecdotal reports from Europe suggest that the vaccination effort is ramping up well on the continent although the euro is lower this morning against both sterling and the dollar. We expect that trend to continue in the coming days with data light in the Eurozone and likely to be supportive in both the US and UK.

US dollar

You think it’s going to be a quiet day; the only real quiet day of the week before markets start becoming volatile and then two news stories torpedo that calm within a few hours of each other.

Initially the dollar strengthened yesterday off a headline that Chinese fighter jets encroached on the airspace of Taiwan; we expect more of these throughout the Biden presidency and amid China’s need to show the world how strong it is following the pandemic.

A few hours later Treasury Secretary Yellen told markets that rates may have to rise in order to calm any overexuberance in markets. “It may be that interest rates will have to rise a little bit to make sure our economy doesn’t overheat,” the former Fed Chair told us.

She later rowed back her comments but the damage was done with tech shares lower and the dollar stronger.

There are so many things that we know should have an effect on prices but it is always the factors that come out of left field that add the volatility. That uncertainty isn’t going anywhere, this week will not be quiet from now.


The New Zealand dollar is the best performing currency overnight following a strong jobs report that showed a decline in unemployment that regained around 40% of the jobs lost in the pandemic. We believe that alongside the Norges Bank – the Norwegian central bank – the Reserve Bank of New Zealand will be one of the first countries to raise interest rates as the recovery improves and beds in.

Market rates

Today’s interbank rates at 08:24 against sterling. Movement vs yesterday.

Euro€1.158 ↑
US dollar$1.389 ↑
Australian dollar$1.801 ↑
South African randR20.10 ↑
Japanese yen¥151.9 ↑

Have a great day.

Read more?

Thanks for subscribing to our market reports!

You've been added to our Chief Economist's mailing list for his morning reports.

Jeremy Thomson-Cook

Jeremy Thomson-Cook

Jeremy has over 13 years experience working in the FX industry. As a specialist in political risk mitigation and currency hedging, he regularly advises clients on the day-to-day moves of the markets and the implications of fiscal and monetary policy on international businesses.