EG: Dollar Rises Against Pound, Euro Ahead Of Scottish Vote
By Ben Eisen, MarketWatch
NEW YORK (MarketWatch) -- The U.S. dollar climbed against the euro and British pound on Monday as investors turned their attention to a looming vote on Scottish independence.
The latest polls showed a divided outlook as Scotland prepares for a Thursday referendum vote on whether to become independent from the United Kingdom. a break-up could ripple across the euro zone, pushing the pound sharply lower, investors believe.
"A 'yes' vote for independence would be cataclysmic. I expect that the impact on the pound would be swift and severe," said Marshall Gittler, head of global FX strategy at IronFX Global, in a note.
The euro (EURUSD) fell to $1.2915 on Monday, from $1.2960 late Friday. The pound (GBPUSD) dropped to $1.6241 from $1.6265.
The U.S. dollar index (DXY) , which measures the greenback against a basket of its rivals, rose to 84.375 from 84.240 on Friday.
The U.S. dollar has also been on the rise as investors prepare for the Federal Reserve's two-day policy meeting, in which the central bank could shift its tone to suggest earlier hikes to its key lending rate are on the horizon. While investors largely expect the Fed to stick to near-zero interest rates until next year, any hawkish shift in tone could push the dollar higher.
Data on Monday showed that the eurozone's trade surplus widened in July, though exports fell on a seasonally adjusted basis.
China posted its weakest industrial production growth since the end of 2008 in August.
In the U.S., the Empire State index, a regional gauge of manufacturing, rose to 27.5 in September, well above expectations of 16.0.
The U.S. dollar fell against the Japanese yen (USDJPY) to Yen107.26 from Yen107.33.
The Australian dollar (AUDUSD) extended its slide against the dollar to 90.24 cents from 90.40 cents.
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