IFX Market Report: Thursday 6th May 2021

Sterling was able to make decent upside gains yesterday morning after the publication of a poll indicating the SNP is likely to miss out on the overall majority as Scot’s head to the polls today. It is widely known that Nicola Sturgeon and the SNP are hoping for an overall majority in order to strengthen their push for another independence referendum.

The Express reported yesterday that the First Minister is “determined to use any majority her party achieves to demand UK Prime Minister Boris Johnson accedes to a referendum”. The report added that “the publication of a Savanta ComRes survey indicating SNP support has slipped in both the constituency vote (down three points to 42) and the list vote (down two points to 34)”. Also Electionpolling.co.uk's swingometer “suggests such a result would leave the SNP six seats short of an outright Holyrood majority”. If the SNP are unable to gain a majority in today’s Scottish elections, it’s likely Sterling will strengthen.

Sky News in contrast have predicted the SNP will “achieve a narrow parliamentary majority in the vote”. Opinium, an award-winning strategic insight agency, say their latest research “found that support for a second Scottish independence referendum remains divided at 50-50”. If the SNP are able to gain a Holyrood majority, it will likely exert tough downside pressure on the Pound as an SNP majority heightens the chances of another Scottish referendum, and a possibility of the collapse of the United Kingdom (as it has historically been known).

While Cable made some upside moves in Wednesday’s morning session, it was unable to sustain those gains and closed just above where it opened. GBPUSD started the day at 1.3904 and finished at 1.3909.

GBPEUR also made impressive gains in the morning on Wednesday, coming close to the 1.1595 mark. The pair however opened at 1.1574 and finished at 1.1587.

EURUSD spent the Wednesday session fluttering between 1.1985 and 1.2020. The pair opened the session at 1.2013 and closed at 1.2003.

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