Sunday September 7, 2014 - 23:45:50 GMT
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Reuters - www.reuters.com
FOREX-Sterling skids on Scotland worries, China data in focus
(Fixes grammatical error in penultimate paragraph)
* Sterling tumbles to lowest in nearly 10 months vs USD
* Poll shows narrow lead for Scottish independence for first time
* Dollar index rebounds to fresh 14-month peak
* China trade data next in focus
By Ian Chua
SYDNEY, Sept 8 (Reuters) - Sterling slumped to its lowest in nearly 10 months on Monday amid worries about political uncertainty after an opinion poll showed supporters of Scottish independence from Britain taking the lead for the first time since the referendum campaign began.
It skidded nearly 1 percent to around $1.6165, reaching lows not seen since Nov. 26. It last traded at $1.6212. Against the euro, the pound fell to two-week lows at 80.16 pence per euro.
With less than two weeks to go before the vote, a YouGov survey for the Sunday Times newspaper put the "Yes" to independence campaign at 51 percent against "no" camp at 49 percent.
"A vote for independence only marks the opening chapter in uncertainty over issues ranging from the timelines for political and economic independence, resultant institutional frameworks, lender of last resort for Scotland, the division of assets and liabilities, fiscal impact and policies, and what currency choices Scotland will have available and choose," analysts at Barclays wrote in a note to clients.
"As a result, realized volatility in GBP, with a downside bias, likely will increase for an extended period."
Sterling was also off sharply against the yen, falling to its lowest in over three months to 169.68 before recovering a bit of ground to 170.56.
The tumble in the pound helped the dollar index rebound to a fresh 14-month peak of 83.956, offsetting a disappointing payrolls report on Friday.
U.S. employers hired the fewest number of workers in eight months in August. Nonfarm payrolls increased 142,000, well below the 206,000 forecast. The jobless rate edged down to 6.1 percent as more Americans gave up the hunt for jobs.
The report prompted benchmark U.S. Treasury yields to fall from one-month highs and undermined the greenback, which retreated to 105.20 yen from a six-year high of 105.71 marked on Friday.
The euro, which has come under pressure after fresh policy action from the European Central Bank last Thursday, steadied against the greenback. It traded at $1.2951, just off a 14-month low of $1.2920.
Currency traders in Asia are likely to take their cue from Chinese trade data expected later on Monday.
That and other data over the coming week are likely to show continued weakness in China's economy in August due to a slowdown in the property sector.
This should increase pressure on the government to unveil more pro-growth policy measures. (Reporting by Ian Chua; Editing by Edwina Gibbs)
© Thomson Reuters 2014. All rights reserved.
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