Poundsterling increased in an early sale this week. GBP is stronger to the USD, JPY, EUR, and many other currencies. The market participants is optimistic to that Sterling based on a data. 

It is especially about the BOE tapering announcement last week and the end of election count in Scotland without any significant issues. In the weekend the result of that election showed that SNP won. 

However, it failed to get the majority voiced. It means that the SNP must create a coalition with some other parties to maintain its reign in Scotland. It erases the worried owned by the market before. 

That worry was about the risk of SNP winning for the unity of the United Kingdom. The leader of the SNP party who is also the Scotland Prime Minister, Nicole Sturgeon, said her opinion about referendum. 

The Commitment of Nicole Sturgeon

In that statement, Nicole announced that she still wants to hold the independence referendum again. It is related to the government coalition that she will formed with the Green party. 

However, Nicole also states her commitment to handle the COVID-19 crisis nowadays. That is why; the market predicted that the Scottish independence referendum can be placed aside. 

The majority movement in the GBP/USD is because the dollar weakening. However, sterling also shows its power by the tapering decision made by the Bank of England. What is next? 

Based on the information, the local election risk was ended with only the small reason to worry. The election done in the north part of the boundary showed that the snp won the Holyrood.

Referendum May Not Become a Long-Lasting Theme

The analyst head of the Danske Bank predicted that the EUR / GBP will move around the 0.87. He also stated that the independence referendum will not become a long-lasting theme.  Why? 

It is because a lot of time is needed before a referendum like that can be held. The reason is that a rejection done by the conservative party government in the Great Britain. That is the possibility. 

Aside from many developments nowadays, there are some new economic schedules which must be tracked due to the pound sterling for a week ahead. The BOE governor will announc a public message. 

That will be done on Tuesday and Thursday. Meanwhile, the British GDP report and many important data which have a massive impact will be released on Wednesday. They are so awaited. 

The USD Was Declining

Elsewhere, the index of America dollar is not in a good position. That currency was around the level of 90.20 in the yesterday sales. That became its lowest record since 26 of February. 

Greenback was gutted amidst some major pairs because the American payroll data release last week was so disappointing. That is why; it may dampening the market expectation for tapering. 

The possibility of the United States interest rate increase can be dampened as well. The employment data and inflation are two main package in measuring the Fed’s monetary policy change. 

The Fed May Increase The Rate

In fact, the Federal Reserve may do the tapering and increase its interest rate. It is especially if the work growth and inflation is quite slow. They don’t have any reasons to change the policies.

The data of Non-farn payroll last week showed that the US government noted the less works than the market expectation. The consensus hoped that the NFP can show for almost a million new jobs in April. 

However, the actual data noted that it only made only a quarter new jobs. That triggers the doubt about the economy recovery in America and the change of some policies made by the Federal Reserve.