Investing.com - The pound rose to session highs against the dollar on Wednesday boosted by opinion polls showing support for the no vote narrowly in the lead ahead of Scotland’s independence referendum on Thursday, as investors also awaited the Federal Reserve’s rate statement later in the session.
GBP/USD was last up 0.47% to 1.6351, the most since September 4.
Cable was likely to find support at around 1.6220 and resistance at the 1.6400 level.
Sterling was boosted after recent opinion polls indicated that support for the yes campaign had retaken a narrow lead ahead of Thursday’s referendum.
The pound dropped to 10 month lows against the dollar last week after polls showed that support for the Scottish pro-independence campaign was on track for a narrow victory.
Since then opinion polls have indicated that support for the “Better Together” campaign has regained momentum, but most polls are indicating that the outcome is too close to call.
Uncertainty over what currency an independent Scotland would use, as well as concerns over how much of the U.K. national debt it would take on have rattled financial markets.
A strong U.K. employment report also helped underpin demand for the British currency.
Earlier Wednesday, the Office for National Statistics reported that the number of people claiming unemployment benefits in the U.K. fell by 37,200 last month, compared to expectations for a decline of 30,000 people.
July’s figure was revised to a drop of 37,400 people from a previously reported decline of 33,600.
The U.K. unemployment rate declined to 6.2% in the three months to July from 6.4% in the previous three month period. It was the lowest jobless rate since the late 2008 and was ahead of forecasts of 6.3%.
Average earning rose by 0.6% in the three months to July, above expectations for a 0.5% gain, after falling by 0.4% in the three months to June. Salaries, excluding bonuses, were up 0.7% year-over-year from 0.6% in the three months to June.
Separately, the minutes of the Bank of England’s September meeting showed that the monetary policy committee were split seven to two on whether to hike rates. Martin Weale and Ian McCafferty both voted in favor of a rate increase.
In the U.S., data on Wednesday showed that consumer prices fell for the first time in 16 months in August.
The Labor Department reported that the U.S. consumer price index fell 0.2% in August, pulling the annual rate of inflation down to 1.7% from 1.9% in July.
The unexpected slowdown in inflation was due to falling energy prices the report said. Energy prices fell by 2.4% last month, including a 4.1% drop in gasoline prices.
The weak inflation data was likely to ease pressure on the Federal Reserve to amend its “considerable period” interest rate guidance pledge at the outcome of its monetary policy meeting later in the day.
The Fed was expected to cut its asset purchase program by another $10 billion at the meeting, which would keep it on track for winding up the program in October.
Fed Chair Janet Yellen was to hold what would be a closely watched press conference following the meeting.
Elsewhere, sterling was also higher against the euro, with EUR/GBP down 0.45% to session lows of 0.7926.