GBP fell against the greenback and even against the euro after a YouGov poll showed support for the pro-independence "yes" campaign had risen to 47%. The lead held by the no campaign has fallen to six points from 22 points at the start of August. Analysts say the pound is likely to weaken further ahead of the 18 September referendum.
The future of the UK currency in an independent Scotland has been a central part of the debate in the lead up to the vote. The Scottish first minister, Alex Salmond, insists Scotland will continue to use the pound if it votes for independence. But all three main political parties at Westminster have said an independent Scotland would not be allowed to continue to use sterling.
Analysts believed there could only be a weak chance of a "yes" victory, but the poll on Tuesday concerned currency markets, raising the cost of hedging against sharp swings in the pound rise. As investors rushed to insure against the impact of a yes vote, one measure of hedging costs – "implied volatility" – looked on track for its biggest one-day rise for three years, according to Reuters. It quoted traders as saying that people were getting more jittery as referendum day approaches.
"The currency market is where it will be most acutely felt," told George Godber, manager of the CF Miton UK Value Opportunities Fund.
Sterling was down 0.5% to $1.653 in late morning trading, having earlier hit a low for the session of $1.6518, not far off a five-month low of $1.6501 in late August.
The pound was also weaker against the euro, which has been under pressure from the prospect of more action by the European Central Bank to shore up growth and head off deflation in the currency bloc. The euro was 0.4% higher against the pound at 79.36p.
Kit Juckes, a currency analyst at Société Générale, highlighted the range of issues a vote in favour of Scottish independence would raise. "A Scottish yes to independence poses far more questions (about the currency, the debt, the oil, the future) than it answers but my best guess is that a yes would trigger a 3-5% fall by sterling as an initial reaction," he said.
