Dollar hits 6-yr high against yen; sterling's Scotland woes ease

London (Sept 11)  The U.S. dollar powered to a six-year high against the yen on Thursday and sterling recovered some ground after a recent bout of nerves over the prospect of Scotland voting for independence in a week's time.

A poll late on Wednesday showed 53 percent of Scots intended to vote against a split from the UK, in contrast to a YouGov poll over the weekend showing 51 percent in favour, helping pull the pound back from 10-month lows against the dollar.

A barrage of warnings from Britain's business and political elite over the consequences of the Scots departing continued, with Scottish-based Lloyds Banking Group and Royal Bank of Scotland both saying they would relocate to England.
Bank of England Governor Mark Carney warned that the currency union pledged by Nationalist leader Alex Salmond would be "incompatible with sovereignty".

"There seems to be a lot more understanding in Scotland right now as to what independence would mean for the currency," said Adam Myers, head of European currency strategy at Credit Agricole in London.

"That realisation ... has definitely been picked up by the Scottish media and has quelled the financial markets' panic somewhat, and that's why I think (sterling) goes up today."

Sterling was up 0.2 percent at $1.6242 after gaining 0.7 percent on Wednesday after the latest poll was published.

Dollar strength

The dollar looked strong across the board, trading at 84.257 against a basket of major currencies, near a 14-month high of 84.519 reached on Tuesday. It is on track for a ninth consecutive week of gains - its longest winning streak since 1997 - as expectations grow that the U.S. Federal Reserve might raise interest rates in 2015.

The greenback traded above 107 yen for the first time since September 2008, taking its gains to almost 2 percent this week and putting it on track for its fifth consecutive week of gains against the Japanese currency.

Source: CNBC