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Financially Speaking: The Week Ahead

September 15th – September 19th – is going to be packed with activity, what with the September 18th referendum on Scottish independence, ongoing US-led military activity against ISIS in Iraq and Syria, and the economic impact of lower interest rates on the euro. The geopolitical focus of the upcoming week will be on Scotland however. The referendum on independence or status quo is set for Thursday the 18th September. The results will be released on Friday the 19th September. In the event that Scotland becomes an independent country, this will have far reaching implications for the GBP and the United Kingdom as a whole. The general consensus is that Scotland will not secede from the UK, but only by a narrow margin. The most recent poll conducted by Survation revealed the Yes vote at 47% and the No vote at 53%. 10% of voters are undecided however. Forex traders were spurred to sell the GBP following the late surge in the number of Yes votes for Scottish independence. This is likely to continue throughout the week. Across the Atlantic in the US, the Wednesday meeting of the US Federal Reserve Bank will come under closer scrutiny. At the heart of the matter is the anticipated timing of the interest rate hike. Analysts are expecting a hawkish stance of the Fed vis-à-vis interest rate hikes. On the back of these upcoming announcements, the CAD continued to slide to 90.14 cents to the USD. This was due in part to lower Chinese inflation – which may be signalling an economic slowdown in the world’s second largest economy. As a result of a shift to boosting domestic demand, China has decreased its purchases of Canadian commodities such as minerals and wood.