* Graphic: Sterling and gilt yields bit.ly/2dgAXn1
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv
LONDON, Feb 27 Sterling fell broadly against
major currencies on Monday, as the prospect of another Scottish
independence vote and signs a major merger was unlikely to go
through renewed fears about Britain's future as it prepares to
leave the European Union.
A report in the Times newspaper said British prime minister
Theresa May is preparing for Scotland to call a fresh
independence referendum in March. The Telegraph newspaper
meanwhile reported that May is planning to curb freedom of
movement for EU citizens as soon as she triggers Article 50 -
Britain's formal notification to leave the European Union.
The London Stock Exchange on Sunday all but ended a
planned merger with Deutsche Boerse by ruling out
meeting a European anti-trust demand, saying it has strong
Sterling slid by as much as 0.7 percent to $1.2384,
its lowest in nearly a fortnight. It last traded down 0.3
percent at $1.2431. It also fell 0.5 percent to 85.15 pence per
"One of the reasons [sterling is down], is the announcement
that the merger between LSE and Deutsche Boerse may be off the
table and I think that's flagged sentiment," said Richard
Cochinos, European head of G10 currency strategy at Citi.
An adviser to the devolved Edinburgh government said last
week that it is increasingly convinced it can win a new
independence referendum and is thinking seriously about calling
one next year as Britain leaves the EU.
The pound had its strongest week last week since January on
Friday, as a lack of major domestic developments in Britain saw
investors' attention drawn to the U.S. economy and European
politics, giving sterling some respite.
"On top of soft data from the UK recently ... these fresh
signals of a 'hard Brexit' and the risk of another Scottish
referendum, enhances our view that the broader outlook for
sterling remains negative," analysts from retail broker IronFX
said in a note to clients.
"Our favorite proxy for any potential sterling softness in
the foreseeable future is still sterling/yen, considering that
the looming political risks in Eurozone could strengthen the yen
due to its safe haven status."
(Editing by Catherine Evans)