Scoxit fear pushes pound lower

A time report that suggested that Scotland’s first minister Nicola Sturgeon likely to demand a second referendum on Scottish independence as early as next week has triggered a selloff in the pound. As the report surfaced, which is available here, http://www.thetimes.co.uk/edition/news/scots-to-demand-new-referendum-no-10-fears-jjnzgt8s0 the pound accelerated its decline and dropped below 1.24 against the dollar.

UK Prime Minister Theresa May’s government is set to start the Brexit process by triggering Article 50 of the Lisbon treaty before March this year according to the announced timeline but if Ms. Sturgeon do demand another referendum then things could get even more complicated and push back the trigger date. The report warns that the UK Prime Minister can reject the demand of the Scottish first minister but such a move could risk constitutional crisis and if she agrees then she would be risking the breakup of the United Kingdom, the 300-year-old union.

We at FxWirePro had hoped that the referendum would be unlikely before the final Brexit deal but nothing can be ruled out with the pro-independence Scottish National Party (SNP). This could also be the strategy of the SNP leaders to keep up the pressure on the UK government so their demands to have EU access get the required considerations. The pound has recovered somewhat and currently trading at 1.242 against the dollar.