Pound Watchers Are Finally Embracing the Harsh Reality Ahead
- Options show traders prepping for Brexit-related turbulence
- Medium-term volatility may track front-end of the curve gains
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Traders have finally started to brace themselves for the risks that lie ahead for the pound.
Even though the currency is up against the dollar Friday, the cost to hedge against swings in sterling has risen, fueled by concerns over Brexit trade talks and fears of a second wave of coronavirus infections. While these risks aren’t new, volatility expectations had been relatively subdued since mid-April.