AFP, Tokyo :
The British pound surged to a more than two-year high against the euro Friday, while it also rallied against the dollar as Scotland appeared likely to vote against independence from the United Kingdom.
The euro tumbled to 0.7809 pounds in Tokyo trade, from 0.7882 pounds and its lowest level since July 2012, as dealers welcomed initial returns pointing to a disappointing night for the “Yes” camp. Some news organisations have also called a “No” win.
Sterling also jumped to $1.6522, its highest level since early September and much stronger than the $1.6389 in New York. It is also well up from the $1.6227 in Asia earlier Thursday.
The pound hit a six-year high of 180.16 yen, up from 178.78 yen Thursday.
“Although a large number of constituencies have still to declare, the results currently indicate that this will probably prove a vote in favor of remaining in the Union,” Simon Derrick, chief markets strategist at BNY Mellon in London, said.
And Sacha Tihanyi, senior currency strategist at Scotiabank in Hong Kong said the pound could rise as high as $1.66 during the day.
The British unit had suffered a sell-off in the past week after an opinion poll showed a majority of people in favour of leaving the 307-year-old union, which could have hammered the economy.
In July, sterling hit its highest level against the dollar since 2008 during the financial crisis, but then plummeted to a 10-month low as polls showed strong gains for the “Yes” campaign.
A vote to stay in the United Kingdom “would remove uncertainty over some very big issues”, said Alan Ruskin, global head of G10 foreign-exchange strategy at Deutsche Bank.
The pound “can now revert back to the traditional fundamentals which had been driving it, such as the relative strength of the UK economy and expectations of tightening by the Bank of England”, he told Dow Jones Newswires.
In other trading, the dollar soared to six-year highs at 109.26 yen, against 108.68 yen in New York, while the euro slipped to $1.2917 from $1.2921.
The European single currency bought 141.12 yen, well up from 140.43 yen on Thursday.
The dollar’s gains reflect the increasing divergence between tightening US monetary policy and expectations for further easing by the Bank of Japan and European Central Bank.
The euro held steady despite a lower-than-expected uptake of the European Central Bank’s first tranche of loans to banks.
