Managers avoid sterling assets as Scottish referendum nears

Investors are turning to US dollar-denominated assets in anticipation of further sterling weakness as the referendum on Scottish independence nears.

Sterling has steadily strengthened versus the dollar for most of 2014, reaching a five-and-a-half-year peak of $1.72 in early July. Since then, however, it has started to slide, falling 0.6% in the month to 12 August. The currency hit a four-month low under $1.67 last Thursday following a more dovish Bank of England inflation report, but managers said there are a number of other factors driving the recent change in sentiment. Chief among them is the vote on Scotland, while the UK’s recovery also faces challenges. Over the weekend the "yes" campaign, which wants independence from th...